Its the Fuel surcharge which has remained unchanged for Upper Class. It was reduced slight for PE and Y very recently. It remains at GBP 113 one way for longer routes in Upper Class (GBP 113 x 2 (return flight) x 1.75 (exchange rate) = $396. Now throw in another $200+ to cover airport taxes (LHR is pricey) and that should bring you up to your taxes and fees.
The taxes appears high if you are using redemption miles and see the full impact of the tax and fuel surcharge.
VS keeps its basic fare low and charges a fuel surcharge which brings the fares up to that of other airlines. So far, VS premium cabins are still showing high loads so competition cannot be that much of an issue.
UK airlines tend to be profitability by charging for seats in the premium cabins rather than providing free upgrades to frequent flyers or not charging fuel surcharge on award seats. Its a very different approach from US airlines but appears to work.
Last edited by KenJohn; Oct 16, 2008 at 3:58 pm