World body warns against jet fuel surcharges

New Delhi, Nov 23 | Updated: Nov 24 2005, 05:30am hrs
Centre for Asia Pacific Aviation (Capa) has warned that airlines should consider cutting their fuel surcharges on passenger tickets in the face of weaker than expected demand.

Its a message well be putting to the dozens of airlines gathering for the annual aviation outlook summit week after next in Kuala Lumpur, said the Centres executive chairman Peter Harbison in a release here. Freight carriers have already started to ease surcharges on shipments, reflecting the lower level of jet fuel prices, it said.

But passenger airlines appear reluctant to move on passenger fuel surcharges. Yet the longer they hold off, the more they risk hurting forward demand , said Mr Harbison.

In some markets, fuel surcharges are actually making passenger bookings less predictable, which is leading carriers into the perverse situation where they are discounting underlying fares to fill aircraft, said Mr Harbison. Another concern weighing on demand in some markets is the fear of a bird flu outbreak. China Southern has already stated the psychological impact on passengers of a possible outbreak, as warned by global health authorities, will reflect on Novembers traffic data.