AF and the fuel surcharge

[airazurxtror]

In an open letter to the CEO of the Air France, the chairman of SNAV ( French National Union of Travel Agents) Jean-Pierre Mas asked to " proceed without delay to the removal of fuel increases " in the price of airline tickets, the barrel of oil having passed in a year from more than $ 100 to less than $ 50.
Recalling that " special ties lie your company and our industry : more than half of air tickets sold in the French travel agencies are Air France tickets, and more than two -thirds of Air France customers on the French market use the travel agency channel " , the President of SNAV explains the CEO that his clients " who are also your passengers do not understand the obstinacy of Air France and some other companies to retain the margins of the price most of your tickets, fuel increases .
" You force us, as distributors , to be accomplices in a policy that we have always fought on the bottom and which now rests on no economic foundation. Some of our clients even ask us what form you will proceed to the repayment of the sums received in recent weeks . " Jean-Pierre Mas concludes his letter : thus doing, Air France will become more transparent and take a leading position, far better than sheepish follower , compelled by a movement that would be initiated by one of your competitors . "
The poor financial health of Air France , however, should push to keep this overhead , just to cover the losses of recent years .

http://www.air-journal.fr/2015-01-22-ai ... 34021.html

[sn26567]

Most airlines (including Ryanair) have hedged fuel prices and are still paying the barrel around $90. Therefore, if fuel surcharges will decrease, it will not be immediately, but when the current hedging contracts expire. And given the poor financial situation of many airlines, instead of reducing fuel surcharges, they will try to return to black figures...

Even Michael O'Leary said he will not reduce prices immediately!

[Flanker2]

I think that this letter is meaningless.
Airlines have suffered through periods of high oil prices and still offered competitive fares, because they had to, because they have competition. Some airlines still managed to make a healthy profit.
Now it's time for them to make some money, if competition doesn't force them to lower their prices anyway, as I'm seeing a steep decline in longhaul fares across the board.

The market will take care of the problem.
If not, they can still lower their fuel surcharges portion, only to increase the fare portion of the total ticket price. It's meaningless as yield management is what will prevail, and YM don't care how many % is the fare and how many % is the fuel surcharge as long as they meet their yield targets.

Fuel surcharges are just a beautiful costume for an ugly ticket price.

It's just a travel association ranting for ranting's sake.

[Stij]

HI Flanker2,

I agree, maybe the EU should force the airliners to include everything that's not optional in the basic ticket price: airport taxes, security taxes, fuel surcharges, administration fees etc...

Cheers,

Stij

[sn26567]

Well, I would prefer them to lower the fuel surcharge and increase the fare portion of the ticket: "free" tickets (on which you still pay taxes and fuel surcharge) will become less expensive and I will be able to use my "Miles & More" in a more efficient way !

[Inquirer]

It's just a travel association ranting for ranting's sake.

Individual people like you may like to do so online while comfortably hiding behind a login, but lobbying groups generally have an agenda when they speak out in public on matters that concern their core business.
Here, it's very probably done as they think it's a good way to be seen as being strongly on the customer's side in the relation between airline and client.
For an industry which is increasingly being bypassed as more people book directly with the airlines through online channels, presenting oneself as a strong defender of the individual consumer is a good idea: it adds value to ones presence in the booking process so people keep coming.

[Flanker2]

Well, I would prefer them to lower the fuel surcharge and increase the fare portion of the ticket: "free" tickets (on which you still pay taxes and fuel surcharge) will become less expensive and I will be able to use my "Miles & More" in a more efficient way !

Nope, they will just deteriorate the mileage programs more than what they are today. = More miles for the same trip.


@Inquirer: I don't know why one would need travel agents anyway. In my view, they are not consolidators but competitors of the airlines. If it's the same fare, I or anyone else would book it directly from the airline.
By the way, I book most of my tickets through online agents, simply because they're cheaper than booking directly, offer a higher ticket class for the same travel class (more miles), even if airlines have to pay them commissions or they take margins on them.

If you're a small corporation, surely the secretary or the travelling people can book tickets. If you're a big one, you can contract this or just hire people who are in charge of such things.

What an idiotic system.

[Inquirer]

Indeed, Which makes it all the more obvious why they need to look for a reason of being still, and trying to be perceived as defending customers interests in the face of those bullying airlines is a nice shot at it, just as I said.
So you see: there's indeed much more to it that you thought at first.

[sn26567]

AirAsia will be abolishing fuel surcharge effective 26 Jan 2015 across all of its airlines in the group.

http://on.fb.me/15BcULE

(and, by the way, their website has been hacked today. Everything back in order now!)