Japanese airlines plan to scrap fuel surcharges, others to follow
The current price of Singapore jet fuel is below the minimum level for adding surcharges
Japan’s airlines are set to remove fuel surcharges with oil trading around a 12-year low, ending a decade of high jet fuel costs that had added as much as 66,000 yen ($563) to the price of a round-trip ticket to the US or Europe.
The current price of Singapore jet fuel is below the minimum level for adding surcharges, Hiroshi Hasegawa and Osuke Itazaki, analysts in Tokyo at SMBC Nikko Securities Inc., wrote in a January 15 report. Singapore jet fuel was at $35.22 as of 4:24pm yesterday.
Airlines are cutting fuel surcharges as oil prices slump.
ANA Holdings Inc., which operates Japan’s largest airline, says on its website that if the two-month average of Singapore kerosene-type jet fuel falls below 6,000 yen for flights originating from Japan, or below $60 for flights originating elsewhere, then it won’t collect a fuel surcharge. Japan Airlines Co. sets the same limits, according to its website.
If Japanese airlines do remove surcharges, they would merely be catching up with some of their counterparts elsewhere. South Korean airlines haven’t levied fuel surcharges on overseas flights since last September. Budget carrier AirAsia Bhd., AirAsia X Bhd and all their affiliates removed fuel surcharges last January. Qantas Airways Ltd. began folding the surcharge into its base ticket price a year ago, adding that its international fares wouldn’t change as a result.
Singapore Air and its regional unit SilkAir lowered surcharges in February 2015.
Cathay Pacific still imposes a fuel surcharge, according to a travel advisory issued on December 29.