Emirates scraps fuel surcharge as oil price falls
Emirates Airline, the Arab world’s largest carrier, has removed the fuel surcharge on all air fares with immediate effect, as the death of al Qaeda leader Osama bin Laden sent oil prices tumbling.
Crude oil tumbled 17 percent on the news, with Thursday’s 8.6 percent plunge to $99.80 a barrel on the New York Mercantile Exchange marking the biggest one-day drop since April 20, 2009.
“In line with the recent decrease in fuel prices Emirates has removed its fuel surcharge on all tickets,” Tim Clark, president Emirates Airline, said in an emailed statement on Sunday.
“We promised our customers from the outset that we would eliminate the surcharge as soon as it was commercially viable and this has now been done.”
Oil surged in the past two months as violence swept through the Middle East, disrupting 1.3 million barrels a day of supply from Libya and raising concerns of shortages from the Gulf.
Brent crude hit a 32-month high in March, reaching more than $127 a barrel. Fuel accounts for 43 percent of Emirates’ costs.
The Dubai government-owned carrier said in April it would add fuel surcharges on some routes to combat rising oil prices, adding up to AED520 to single air fares in first and business class.
Clark warned last week that surging oil prices would “bring all of us to our knees,” and warned low-cost carriers could be the first casualties.
“Nothing can be sustained at this level so something has to be done,” he said. “If by the end of the year we still have $130, $140 or $150 then watch this space.”
British Airways last month announced a third fuel surcharge hike on long-haul flights.
Emirates will announce its results for the second half of 2010 on May 10. Despite a “tough” year, Clark said the airline had managed to stay “on course”.