Virgin Atlantic to reduce its fuel surcharge by R40
November 25, 2005
By Audrey d' Angelo
Cape Town - Virgin Atlantic Airways has knocked R80 off the price of its return tickets between South Africa and London by reducing its R363 fuel surcharge by R40 for each sector flown.
Peter Barry, the airline's general manager in southern Africa, explained that although the oil price was still high, it had come down from the level it reached during September.
Like most airlines, Virgin had opted to introduce a fuel levy to recover some of the higher price it was paying for aviation fuel. However, it now thought it was "only fair" to bring the levy down to some extent on all its routes worldwide.
So far it is the only airline flying to South Africa to announce such a cut. Stephen Forbes, the spokesperson for British Airways (BA) in South Africa, said: "We continually review the oil price, but our view is that it is volatile and is still high.
"We expect it to move even higher in coming months."
Forbes said BA's fuel bill for the current year was expected to be £1.6 billion (R18 billion), a rise of £525 million on the previous year. At the time of going to press, SAA and other airlines had not replied to questions on whether they would cut their levies.
Barry said Virgin's fuel costs in the past financial year had amounted to more than R3.3 billion, accounting for 22 percent of operating costs and coming in R681 million above budget. The fuel surcharges only recovered about one-third of this extra expenditure.
Warning that future oil prices were likely to rise above current levels, Barry said Virgin would "keep the surcharge under constant review and adjust it only when necessary".
He said: "It now looks likely that our fuel bill could exceed R4.3 billion in the current year, which means fuel would amount to 25 percent of the airline's operating costs, a total increase of 50 percent over two years."
Johan Gerber, the managing director of Tourvest's outbound travel division, welcomed the drop in Virgin's fuel levy. He said the R80 cut in the price of a return ticket might not make much difference to corporate travellers but it would to a family going on holiday.
Thulani Nzima, the chief executive of the South African Travel Centre, a chain of franchised travel agents wholly owned by SAA, said Virgin had "a comparatively small share of the South African market" and he did not think its example would make other airlines flying between this country and Europe cut their fuel levies.
Virgin flies daily between London and Johannesburg. At present, it has three flights a week to Cape Town but this will rise to a daily service from January 29 until the end of March to cater for peak holiday traffic.
|
|
