Sharp increase in fares for next year

And I don't just mean Virgin either.
Looked at the cost of flying from BHX-AGP for three of us, exact same time and exact same flights at the start of availability.
This year we paid 326, next year the prices are coming out at 578!

Virgin LGW-MCO, this years price two adults, one child in UC, End Nove 4,181.70 (VH Fly drive) Next year, same time, again VH Fly drive 5,615.50. a rise of 1,433.80, or the price of little 'uns fare again.

Tough year coming up!

[Nottingham Nick]

Err... have you seen the price of oil? Maybe that has something to do with the price increases? [;)]

Well I've seen the price of oil and I'm still surprised at the increase in fares. We are just going to have to get used to it or stay at home. Then I guess the prices rise even more.

[Darren Wheeler]

This is what sales were invented for.

Originally posted by Nottingham Nick
Err... have you seen the price of oil? Maybe that has something to do with the price increases? [;)]

I thought that was what the recent big hikes in 'fuel surcharge' were supposed to be paying for... [:w]

Boo

[Nottingham Nick]

I know we have been over and over this in previous threads, and I am not trying to be some sort of apologist for rising prices; but when you consider oil was $60 a barrel in early 2007 and is currently around $135 / $136 it isn't surprising that prices are going up.

Every industry that has transport and production costs will be raising their prices, not just airlines. The fuel surcharges may cover some of the increased cost of jet fuel, but will they cover all of the other extra bills the airline have to pay?

After this, think about the small matter of the tanker drivers 14% pay rise over two years. How many unions are now going to settle for 3% or 4%? I am not an economist or financial expert, but I fail to see how any industry is going to avoid passing on the extra costs to the consumer.

Maybe this is an off-topic thread, but it seems to me we are heading back to the bad old days of hyper inflation. [?]

Nick

If fares are going up due to fuel, shouldn't the fuel surcharge be reset back to zero? It seems fares can go up, as well as the fuel surcharge, giving the appearance of profiteering.

[Nottingham Nick]

I have many issues with the fuel surcharge. The inference, to me, is that it was a short term charge imposed to cover extra costs caused by unexpected fuel rises. Whilst I accept that fuel has continued to rise well beyond expectations, I believe that the majority of the 'surcharge' element should have been incorporated into basic ticket costs by now.

In practical terms, of course, it means that airlines can add it to all fares including reward flights; meaning the cost of your 'free flight' with reward points is far from free. [V]

Nick

The surcharge has never covered the entire rise in fuel costs to the airline so they are certainly not using it as a vehicle for making profit. Given that UK inflation is looking upwards of 4% for Q4, a rise in fares is not simply about the oil price - everything is more expensive and someone has to pay for it!

Maybe we will begin to see more people moving backwards down the plane and having to turn right rather than left on the way in. After all, thats the easiest way to keep your travel costs down. The increases are making UCS less good value for money as the several thousand pounds spent on the upgrade could easily cover the entire cost of a holiday. If things carry on the way they are going, most families are going to have to tighten their belts and whilst I personally doubt most people would remove their holiay from the budget (after all, we all wanna have fun), they might decide to economise on some of the extras.

While the cost of fuel may well have a lot to do with the fare increases the fact remains that Virgin along with other airlines must think they can fill enough seats at the fares they are charging. If they can then its simply a case of supply and demand which at the end of the day is what our economy is based on.

At the end of the day they cannot afford the front of the plane to be empty so they must think there are people out there willing to pay the higher fares, which I would think with the LGW fleet is quite possible due to the smaller number of seats. If they can then who can blame them for maximising their revenue, what business doesnt!

If they have got it wrong and they dont fill enough seats with the higher fares then you will see lots of last minute sales fares to try and get people in the seats and the fares coming down for next year!

I would say however I do think its about time the fuel surcharges were dropped as its quite clear fuel prices are not going to come down in the near future and just included in the fare, which would be the correct thing to do, but its not going to happen as then people tracelling on miles tickets or other low cost fares subject to surchares would not be paying the amount of the current surcharge!

Its clear a lot of the bigger airlines are going to cut capacity, thus enabling higher prices as they can only afford to fly a full plane with reasonable fares and the smaller airlines will try to maximise their fares where they can! Virgin seems to be trying this with Upper Class and quite possibly Premium Economy sue to demand being quite strong on many routes, time will tell if demand remains strong with inreased fares!

Originally posted by michaeljtodd
While the cost of fuel may well have a lot to do with the fare increases ...

Really good post - I agreed with all. Yes, time for fuel surcharges to be binned and converted to ticket prices.

Fuel surcharges only meet part of the fuel cost increases.
Even assuming VS have hedged their fuel at a level of say $125 per barrel their fuel bill will increase by £322m this year. The recent increases in fuel surcharges should raise £123m, so there is a huge gap!
Compare that gap with the total fuel bill in 2006/7 of £489m - its almost a 50% increase.

Imagine what's happening to the many airlines with little or no hedging!!!

Originally posted by AlanA
And I don't just mean Virgin either.
Looked at the cost of flying from BHX-AGP for three of us, exact same time and exact same flights at the start of availability.
This year we paid £326, next year the prices are coming out at £578!

Virgin LGW-MCO, this years price two adults, one child in UC, End Nove £4,181.70 (VH Fly drive) Next year, same time, again VH Fly drive £5,615.50. a rise of £1,433.80, or the price of little 'uns fare again.

Tough year coming up!

That sounds a bargain next to the quote I got which was £7400 for family of 4 in PE, not even Upper! Many other carrier's were offering business for a few thousand less, including BA. Needless to say VA lost my business.

Does anyone know why Virgin prices are not staying with BA next year?
Usually i check both and they are within a few £'s of each other. Next May BA are coming out more than £400 cheaper than Virgin
Looking at UC flights.

Never understood why and how airlines can get away with fuel surcharges anyway. How would you feel if you bought a ticket to a concert, only to be asked for an extra £10 when you turned up 'because the price of the electricity has just gone up, sir'?

It seems only airlines (and other holiday/travel related businesses get away with this and I've never understood why.

Chris

[mitchja]

Originally posted by cshore
Never understood why and how airlines can get away with fuel surcharges anyway. How would you feel if you bought a ticket to a concert, only to be asked for an extra £10 when you turned up 'because the price of the electricity has just gone up, sir'?

It seems only airlines (and other holiday/travel related businesses get away with this and I've never understood why.

Chris

It's already happening to some extent. Most courier companies now ask for a fuel surcharge and cross-channel ferries are about to start doing the same. The company I work for charge what we call 'an energy surcharge' for all orders as do most of our suppliers.

The only reason why you see it with airlines is because they call it a fuel surcharge. Many compaines just hide it as it's bundled into the total price.

Regards

Considering charging more myself for fuel and charging for favours I would do customers in the past. Collecting certificates, delivering forms and visiting registrars more home visits than necessary too have to be curtailed. A tank of fuel is lasting me 5 days just ferrying paperwork from one place to another. There are potentially 3 cars doing this all week and then on top of that removal cars and Funeral cars.

Originally posted by musicmanbrain
Maybe we will begin to see more people moving backwards down the plane and having to turn right rather than left on the way in. After all, thats the easiest way to keep your travel costs down. The increases are making UCS less good value for money as the several thousand pounds spent on the upgrade could easily cover the entire cost of a holiday. If things carry on the way they are going, most families are going to have to tighten their belts and whilst I personally doubt most people would remove their holiay from the budget (after all, we all wanna have fun), they might decide to economise on some of the extras.

Agree 100%

GJ

Originally posted by Nemmie
Does anyone know why Virgin prices are not staying with BA next year?
Usually i check both and they are within a few £'s of each other. Next May BA are coming out more than £400 cheaper than Virgin
Looking at UC flights.

A number of reasons why.

BA is a bigger airline so potentially could have more options before it puts the price of ticket up.

BA has also decided to reduce its growth drastically in the next year to keep prices low.

VS has done all this but still has to put its prices up. I would imagine that BA will follow suit very shortly.

At the end of the day, oil prices have sky rocketed. All airlines, no matter how large, are being effected and will continue to be so. Without sounding too doom and gloom, I believe this to be only the start as far as the airline industry is concerned. And it is true that it will be everyone in every class of travel that will be affected.