BA has revealed the extent of its fuel hedging for 2008-09. The carrier says that its fuel bill has increased by $1 billion to $3 billion in the last 12 months, and now makes up 35 per cent of its costs compared to 10 per cent in 2000. BA says it has hedging for the first part of 2008-09 (May to October) is 73 per cent at $84 and then for the remainder of the year it is 58 per cent at $88.
While defending the fuel surcharges, Richard Tams, general manager of UK and Ireland corporate sales, says: ”Obviously the ability to hedge going forward is going to become more difficult.
”Surcharges are a quicker way to market,” he said. ”And there”s been no huge demand from corporate clients for them to be rolled into the ticket price. The transparency of charges shows where they are appearing.”
Despite this, it is clear some travellers do object to the current system, as seen from the forum on businesstraveller.com.
BA also plans to cut up to five per cent of its winter capacity, with announcements coming ”in the next two weeks”, though Tams says this ”will not impact BA”s business routes.”
”For this winter the capacity cuts will be spread across both Heathrow and Gatwick,” he said, ”and we won”t be compromising the business traveller. The routes cut will be on routes we have multiple departures, and won”t be on New York.”
There is uncertainty over the scale of the cuts, with Willie Walsh being quoted as seeing the cuts as between 3-5 per cent, while other quotes put it as being flat rather than a previously projected 2 per cent growth.
Tom Otley