Emirates goes it alone on jet-fuel surcharge

New-entrant airline Emirates has broken ranks with New Zealand's aviation industry by absorbing controversial fuel surcharges into overall passenger fares.

The Middle Eastern airline, which operates 28 return flights a week to and from New Zealand less than two years after having arrived here, says all fares for travel from next Sunday will include any fuel surcharges now advertised separately.

"The fuel price is part of the operating cost of an airline, unlike airport taxes or security levies, and we feel it makes more sense to the customer and to us simply to make it part of the fare," Emirates New Zealand manager Chris Lethbridge said yesterday.

He said Emirates already incorporated fuel costs into fares elsewhere around the world, but had followed the "local industry norm" until now in viewing surcharges as a temporary measure until the price of jet fuel fell. But higher fuel prices had become part of life.

Travel agents welcomed the announcement, especially as they are denied commissions on surcharges.

"I would expect you will see a move by agents to encourage passengers to fly Emirates," Travel Agents Association president James Langton said last night.

"It was fast getting to the stage that the travel industry would have been getting no remuneration at all from airlines, and this is a wonderful example of an airline that wants to work as a partner with agents."

The move follows a new round of surcharge increases throughout the aviation industry this month, after an 80 per cent rise in the price of jet fuel in the past year.

Air New Zealand, which raised its surcharge by $22 to $92 for return flights to London and by lesser amounts for shorter trips, said it had no intention of following Emirates as this would increase the cost of travel by incurring higher travel agent commissions.

Spokesman Mike Tod said displaying surcharges separately from fares offered "complete transparency", in line with the airline's commitment to pass savings back to passengers once fuel prices began dropping "on a sustainable basis".

Consumers' Institute chief David Russell also hailed the Emirates announcement, although he said it could prove "a bit two-edged" if fuel prices dropped and the absence of a stand-alone surcharge made it easier for airlines to avoid cutting fares accordingly.

The add-on debate

Should airlines include their fuel surcharges in advertised ticket prices?

* Yes, says Emirates NZ. Fuel is part of an airline's operating costs and doing so makes more sense to passengers.

* No, says Air New Zealand. Doing so would push up airfares - through higher commissions to travel agents - and ticket prices might not come down when fuel prices drop.