Steve Keenan
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When BA's communications director Iain Burns spoke to his counterparts at Virgin Atlantic and talked surcharges in June, 2006, there would have been no inkling that the lid was about to blow off their cosy chats and land BA with a huge bill.
After all, discussions about what their respective airlines were going to add in the way of fuel surcharges had gone on for two years or more. Who was to know?
It was back in May, 2004, that BA and Virgin Atlantic first introduced a fuel surcharge on longhaul routes. Three months later, BA and Virgin swapped information about their next increase and announced an increase to £6 on the same day.
So, two years later, why would Burns think anything would be different on one of his regular calls to Virgin? Because on that June day, his Virgin counterpart had been ordered to embark on a course of entrapment by spooked Virgin management, taping Burns and handing evidence over to the Office of Fair Trading in order to escape prosecution themselves.
Over that two-year period, the fuel surcharge had risen from £5 to £70 for a typical long-haul return flight, with conversations held between the airlines on a regular basis.
It was a cosy and complacent, but with no serious intent to deceive. The fuel bills were going up, the airlines were keen to pass some cost on so it was more a question of how much and when. Hence the chatty calls between the two. But as history tells you with BA and Virgin, it was eventually bound to end in tears.
As surcharge levels got higher and public criticism became shriller, Virgin dobbed BA in. Having been so badly singed, it is unlikely either will collude in such an overt way again, particularly as their public image has been tarnished by the escalating surcharges.
The Air Transport Users Council, a consumer body, has long criticised the arilines. James Freemantle, industry affairs adviser at the AUC, said: “These surcharges don’t bear any relationship to the real costs of fuel. It’s just an arbitary amount they add occasionally when they feel like it.”
Certainly, BA and Virgin's levels of surcharges are unsurpassed among other UK airlines. Budget airlines Ryanair and easyJet, do not impose surcharges at all. Peter Sherrard, a spokesman for Ryanair, said: “Since May, 2004, the price of oil has doubled - but BA’ fuel surcharge has increased 17-fold. It is a rip-off and profiteering.”
Other airlines were content to let the flag carrier and Virgin lead the way (and take the flak) in imposing surcharges, so it would have been only those two airlines that would have regularly discussed what levels were being set.
And now, with surcharges so high, there really in no need to collude anymore. Since Virgin blew the whistle, surcharges have resumed an upward curve as the price of oil has surged to $69 a barrel, $10 higher than a year ago.
BA's fuel bill is now £2bn a year and its surcharges have risen to £43 one way for flights over nine hours. The surcharge for long-haul flights under nine hours is £38. Virgin's surcharges are £34 and £38 respectively. Not quite the same then.
The increases mean that a BA flight to New York next month, for example, will typically cost £276 return - but taxes, booking charges and fuel surcharges take the total to £428. The extras are equivalent to 55 per cent of the cost of some flights.
But the highest surcharge of full is that from Australian airline Qantas, which yesterday increased its surcharge to a whopping £78 one-way, or £156 return between the UK and Australia. With a bill like that to sell to the public, the communications director must wish he could phone a friend.
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