Fuel surcharges cancelled by Air France KLM and El Al

As jet fuel prices have dropped and begun to stabilise, Air France-KLM and El Al have announced that they will rescind the special fuel surcharges they introduced in the earlier part of the year.

Many industry sectors dependent on oil for their operations added fuel surcharges at one or more times during the year, as prices continued to rise. Now that prices have dropped from a high of $147 per barrel down to the $105 level, the questions these companies face is whether to remove these surcharges, and when to do so.

Two airlines are leading the repeal of the charges that have raised the cost of airfares for passengers worldwide. The Associated Press is reporting that Air France-KLM’s action will reduce ticket prices by up to $20.22.

Over the past few years, Air France-KLM levied numerous surcharges. On 8 July of this year, when it introduced the most recent charge, it made a promise to its customers that the charge would be removed when oil prices moved to $125 per barrel, and showed some stability at that level.

El Al is giving its frequent flyers a break, cutting surcharges on some of its flights, meaning a reduction in ticket prices of $40-100.

Continental Airlines has headed in the opposite direction, and following the lead of many U.S. carriers, charging its economy class passengers $15 to check their first bag.

A Continental spokesperson, speaking to the AP, said that the purpose of the fee was to help offset high fuel costs.

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