International Air Transport Association CEO Tony Tyler has reassured air travellers that fuel surcharges will start coming down if the current downward trend of oil prices continues.
"In many cases, airlines operate now with a basic fare and a fuel surcharge of some kind and the fuel surcharge in many airlines is directly linked to the price they’re paying for fuel," IATA CEO Tony Tyler said at the Toronto Global Forum.
"You’ll see the fuel surcharge very quickly come down."
Explaining why that has not already happened, Tyler said prices for jet fuel lag about one month behind the price of oil and many airlines hedge their fuel costs.
However airlines are in no mood to be so benevolent with strong demand for air travel.
"In a strong demand environment, we don’t plan to go off and just proactively cut fares," American Airlines Group president Scott Kirby said last week.
Rick Seaney, CEO of FareCompare which analyses ticket prices, said there is little transparency for the average traveller as rules are different for domestic and international flights in terms of how the fuel surcharge component is priced.
Seaney said fuel costs could add as much as $450 to a flight from the US to Europe.
** The IATA reassurance came as TravelMole’s latest poll found 80% of UK subscribers believe fuel surcharges should be reduced immediately.
The price of fuel has recently reached a five-year low.
