Virgin cuts fuel surchargeLower oil prices prompts airline move
13 October 2006
Virgin Atlantic has announced it's cutting its fuel surcharge from £35 per flight to £30.
The airline said lower world oil prices meant it could now reduce the surcharge.
German carrier Lufthansa has also reduced its fuel surcharge today following on from yesterday's decision by Dutch airline KLM to reduce its fuel surcharge.
Virgin Atlantic Chief Executive Steve Ridgway said: 'With lower oil prices, we can now pass some of the small savings we are making back to our travellers.
'Our fuel costs remain at historically high levels - fuel accounts for around a third of Virgin Atlantic's total costs - and the fuel surcharge only recovers around half of the extra costs we have been facing.
'The other half has either been absorbed by the airline or, until recently, has been substantially met through hedging, where we were able to forward buy fuel at lower rates.
'Today, we are having to buy at much higher rates, and so the value of hedging has reduced significantly. We will continue to keep the surcharge under review, depending on the price of oil and the total costs to the business.'