AER LINGUS yesterday hiked its fuel surcharge on transatlantic flights by up to 15.4 per cent in a bid to offset the effects of the high price of oil.
The move came on a day when the price of jet fuel in Europe dropped by $31 (€19.9), or 2.9 per cent, to $1,043.25 a tonne. The price of crude oil declined by $5 a barrel in New York as demand fell on fears of an economic slowdown.
Aer Lingus passengers flying between Ireland and Orlando will now have to pay €60 (or $77) each way, compared with €55 (or $77) previously.
Those flying between Dublin or Shannon and Los Angeles and San Francisco will see the surcharge rise by €10 (or $9) to €75 (or $99) per sector as a result.
The fuel charge on inbound flights from New York, Boston and Washington will rise by $5 to $75. The same increase is being applied to flights from Chicago, which will carry a surcharge of $82. This move is aimed at countering the effect of the dollar's weakness.
The fuel charge on outbound flights to those four cities remains unchanged. The price increases will take effect on March 29th.
Oil prices are having a devastating effect on airlines. UK carrier EasyJet yesterday issued a profit warning, saying the record price of oil would add £45 million (€57 million) to its fuel bill in the second half of its financial year. This will wipe out EasyJet's anticipated profit growth for the year.
Shares in the budget airline fell by 9.5 per cent in London yesterday on foot of the news.
Aer Lingus's decision to increase its fuel surcharge came as a surprise.
Just last week, following the announcement of its full-year results, Aer Lingus chief executive Dermot Mannion appeared to rule out an increase in the surcharge in the short term.
Enda Corneille, Aer Lingus's corporate affairs director, confirmed that the same message had been delivered on its investor roadshow, which began shortly after the release of its annual results.
He added that the airline was forced to revise its position in the past couple of days as the price of oil remained stubbornly high.
"We finalised this yesterday," he explained. "A week ago, we weren't looking at this, but we never stop thinking about it."
Aer Lingus last week estimated that its fuel bill would rise by $185 million in 2008. Fuel now represent about 21 per cent of its overall costs, compared with around 19 per cent a year ago.
Aer Lingus introduced a surcharge on flights to the US in May 2006, charging €35 per sector. It cut the charge in February of last year before increasing it again in May and October.
Separately, Ryanair said yesterday that it would add a Berlin service to its portfolio of flights from Shannon at the end of May. The airline will also add a fifth aircraft at Shannon from this month, and will resume its Tenerife service from the airport from June 1st. Extra frequency will be added to the Shannon-Malaga route.
The carrier currently has 30 routes operating out of Shannon, delivering an estimated €350 million visitor spend annually to the region. It expects to carry two million passengers through Shannon this year, having established a base at the airport in 2005.
Ryanair has also outlined plans to launch its first domestic routes in France and Germany.
Starting in May, Ryanair will fly between Marseille and Beauvais airport outside Paris in France, and from Frankfurt-Hahn to Schonefeld airport in Germany's capital of Berlin.
Ryanair said the routes would "slash" the cost of domestic travel and save consumers €26 million a year.
Air France plans to end flights between Paris's Orly airport and Avignon, Rennes and Lyons - a move prompted by competition from high-speed trains.
