Lufthansa hike fuel charges
FRANKFURT, June 11 (Reuters) – Germany’s two biggest airlines, Deutsche Lufthansa and Air Berlin, plan to raise the surcharges they impose on passengers to offset soaring fuel costs for the second time in a month as oil hovers above $130 a barrel.
Lufthansa will charge 24 euros ($37.19) each way on domestic and European routes from June 16, while Air Berlin will charge 25 euros — both increases of 3 euros –, the carriers said on Wednesday.The long-haul surcharge will rise by 10 euros each way to 92 euros at Lufthansa and 95 euros at Air Berlin.
Air Berlin added that surcharges to medium-haul tourism destinations would rise 3 euros to 35 euros, with flights to Egypt, Madeira and the Canary Islands seeing surcharges up 5 euros to 45 euros. “In recent weeks, crude oil and kerosene prices have continued to rise … In response to this development, Lufthansa is adjusting its fuel surcharges on its flights,” Lufthansa said.
Neighbouring Air France said on Wednesday it too will increase its fuel surcharge by 2 euros on domestic flights, 5 euros on medium-haul flights, 10 euros on long-haul flights and 20 euros on very long-haul flights from June 13.”Half of this increase will be withdrawn as soon as the price per barrel remains steady under $120,” Air France said in a statement. “The remaining increase will be withdrawn as soon as the price per barrel remains steady under $115.”
Lufthansa’s air freight division, Lufthansa Cargo, also plans to raise fuel surcharges imposed on customers to 1.20 euros per kilogram from 1.15 euros from June 23, a source familiar with the matter said on Wednesday. Lufthansa shares were 0.5 percent lower at 15.63 euros by 1517 GMT, while the German blue-chip DAX index was down 1.4 percent. Air Berlin shares were 5.6 percent lower at 5.92 euros, less than half the price they first listed two years ago. Air France stock was 2 percent lower at 16.02 euros.
Lufthansa last increased its fuel surcharges on May 14 and repeated on Wednesday it would monitor oil prices and make further adjustments depending on jet fuel price trends. Its smaller German competitor last raised them on May 16. UK rival British Airways last week lifted its fuel surcharges to 16 pounds ($31.29) each way on short-haul routes, 78 pounds on long-haul routes of less than nine hours and 109 pounds each way on flights of over nine hours.
The price of oil hit a record $139.12 a barrel on Friday and was trading at over $133 on Wednesday. Airlines have said rising fuel costs will hit profits this year despite efforts to hedge against increases, with some carriers looking to trim capacity and cut services to stem losses.
The International Air Transport Association (IATA) said this month that the global airline industry was set to record a loss this year, possibly as high as $6.1 billion, as carriers struggle with sky-high fuel prices.
Commerzbank senior commodity analyst Eugen Weinberg said on Wednesday the oil price could peak at around $150-170 in the next three months.
Lufthansa said last week it expected its fuel bill to jump to 5.7 billion euros this year from 3.9 billion in 2007. In April, Lufthansa had estimated 2008 fuel costs of 5.26 billion and gave a range of scenarios from 4.88 billion with oil at $89 a barrel to as much as 5.71 billion at $134.
Air France-KLM last month warned it would have to expect a 1.1 billion euro rise in fuel costs, squeezing profits this year and forcing it to find 150 million euros in savings. Air Berlin meanwhile abandoned its full-year profit forecast last month and said it was scrapping unprofitable routes. It said it was reviewing its entire long-haul network as it tries to weather the higher cost of fuel.