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Reducing fuel surcharges - reward flights

Reducing fuel surcharges - reward flights

Old Oct 15, 08, 7:07 am
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Reducing fuel surcharges - reward flights

BA have just reduced their fuel surcharge by 26 pounds for long-haul return flights (20 for medium haul).

As oil approached $75/bbl I suspect this is going to be an increasingly regular occurance. Has anyone had an experience in trying to reclaim some of the surcharge for a future reward booking (I booked last month for a flight in April).

The only way may be to cancel and rebook or change the flight. Cancel will definately work but may result in you losing the flight (and incurring a 20 pounds charge - but the fuel surcharge may have fallen more than this) or a change would cost 25 pounds but could work out quite expensive if you have multiple legs and two single journey bookings (as I do).

Any thoughts?

Jon
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Old Oct 15, 08, 7:44 am
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Originally Posted by monkeymagic View Post
BA have just reduced their fuel surcharge by 26 pounds for long-haul return flights (20 for medium haul).
Only for WT and WT+ though...
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Old Oct 15, 08, 8:06 am
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This whole fuel surcharge saga will be much like the energy companies I suspect. Like greased lightning putting them up but very slow to bring them down if at all.
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Old Oct 15, 08, 8:12 am
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I heard that NH has actually just increased their surcharge

Generally they are coming down, just very slowly. Fuel is now at March levels and the surcharges were lower in March than they are now as a general rule. Anyone know what BDs surcharges are at the moment? Redeeming to LAS has been a killer recently.
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Old Oct 15, 08, 8:36 am
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Part of the problem is that many of the airlines hedge their fuel and therefore are locked into certain prices, regardless of where the oil price moves. A good thing in a raising oil price environment... the opposite in falling..
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Old Oct 15, 08, 10:42 am
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Originally Posted by Tiger_lily View Post
This whole fuel surcharge saga will be much like the energy companies I suspect. Like greased lightning putting them up but very slow to bring them down if at all.
Very true, Lufthansa will drop by a whole 5 Euro long haul, 3 Euro short and domestic on flights booked after 20th October.
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Old Oct 18, 08, 5:35 am
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Originally Posted by Tiger_lily View Post
This whole fuel surcharge saga will be much like the energy companies I suspect. Like greased lightning putting them up but very slow to bring them down if at all.
Whilst this may be off topic, I make no excuses for correcting a blatently incorrect statement. Energy companies are not like "grease lightening" putting prices up or necessarily that slow to bring them down. You clearly don't know how fuel price contracts work or how hedging is used to offset variations in prices and protect the customer against peaks. You have to make decisions from many months or even a year ahead to hedge against prices, or the costs would spike and tumble on a day to day basis and individual customers would face a price lottery. Once you've signed up to a hedging or contract deal its fixed, just like your fixed interest morgage is fixed, for the duration of the term. The price hikes only occur when the rolling average goes up or comes down. Sorry to be so blunt in my response but this is a common misunderstanding amongst the general public about how fuel is costed and charges passed on to customers. I'm not so knowledgeable about airlines but very knowledgeable about fuel prices and I have no doubt the airlines work in the same way as the energy companies.
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Old Oct 18, 08, 5:38 am
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Originally Posted by monkeymagic View Post
Part of the problem is that many of the airlines hedge their fuel and therefore are locked into certain prices, regardless of where the oil price moves. A good thing in a raising oil price environment... the opposite in falling..
only those locked into futures contracts....those that simply have options on fuel are able to walk away at only the loss of the options contract
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Old Oct 18, 08, 5:38 am
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Originally Posted by monkeymagic View Post
As oil approached $75/bbl I suspect this is going to be an increasingly regular occurance. Has anyone had an experience in trying to reclaim some of the surcharge for a future reward booking (I booked last month for a flight in April).
If BMI increased their surcharge, would you be posting here wondering if they would collect the increase?
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Old Oct 18, 08, 5:41 am
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Originally Posted by lhr baby View Post
Once you've signed up to a hedging or contract deal its fixed, just like your fixed interest mortgage is fixed, for the duration of the term.
Indeed - BMI are hedged for 75% of their fuel, and that was at the beginning of the year. LINK.
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Old Oct 18, 08, 2:52 pm
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Originally Posted by lhr baby View Post
Whilst this may be off topic, I make no excuses for correcting a blatently incorrect statement. Energy companies are not like "grease lightening" putting prices up or necessarily that slow to bring them down. You clearly don't know how fuel price contracts work or how hedging is used to offset variations in prices and protect the customer against peaks. You have to make decisions from many months or even a year ahead to hedge against prices, or the costs would spike and tumble on a day to day basis and individual customers would face a price lottery. Once you've signed up to a hedging or contract deal its fixed, just like your fixed interest morgage is fixed, for the duration of the term. The price hikes only occur when the rolling average goes up or comes down. Sorry to be so blunt in my response but this is a common misunderstanding amongst the general public about how fuel is costed and charges passed on to customers. I'm not so knowledgeable about airlines but very knowledgeable about fuel prices and I have no doubt the airlines work in the same way as the energy companies.
Thanks for the flaming - I really appreciate it.

It doesn't matter if I know how these types of deals work or not. It's public perception, actually, that this is happening.

And more to the point why are BA and Virgin reducing them only in Economy? There's no justification for wringing the last penny out of J pax IMO
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Old Oct 18, 08, 4:21 pm
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Originally Posted by Tiger_lily View Post
And more to the point why are BA and Virgin reducing them only in Economy? There's no justification for wringing the last penny out of J pax IMO
I suppose that with a J seat... the passenger could in theory be checking in 2 bags, hence twice the weight and more fuel needed nah, but seriously, I don't agree with it either, but what can you do?

On a serious note, Southwest in the USA has just made it's first loss due to fuel hedging this article gives a good explanation how it works:

http://aviationblog.dallasnews.com/a...e-you-die.html
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Old Oct 18, 08, 4:27 pm
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Originally Posted by seattle29 View Post
On a serious note, Southwest in the USA has just made it's first loss due to fuel hedging
I never thought I'd see the day that that happened. Is it true that UA hedged at ~$130?
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Old Oct 18, 08, 4:35 pm
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Originally Posted by Tiger_lily View Post
I never thought I'd see the day that that happened. Is it true that UA hedged at ~$130?
Well, UA has said it expects to lose $544 million due to fuel hedging, just in 3 months

One can only assume that they've hedged at well over $100 per barrel for months ahead!

http://biz.yahoo.com/ap/080917/airlines_fuel.html?.v=3

And yes, Southwest has also made a loss due to its fuel hedges

http://www.latimes.com/business/la-f...,6167330.story

Just goes to show how volatile this whole industry is... I think some of us take it for granted sometimes!!
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Old Oct 18, 08, 4:39 pm
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Originally Posted by seattle29 View Post
I suppose that with a J seat... the passenger could in theory be checking in 2 bags, hence twice the weight and more fuel needed nah, but seriously, I don't agree with it either, but what can you do?
It's not like you don't pay for the privilege

Anyway, thanks for the links, most informative.
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