Flag carrier Singapore Airlines and its regional arm
SilkAir announced on Wednesday (March 1) the folding-in of fuel and
insurance surcharges into its base fares, aimed at providing a
simplified fare structure for its passengers.
The changes will be implemented progressively by
region, starting from March 28 and is expected to be completed by
May 2017, SIA said in a press release. “This will not result in
immediate changes to ‘all-in’ fares, which will continue to be
determined by market supply and demand,” the national carrier
added.
Fuel and insurance surcharges will also no longer apply
to KrisFlyer frequent-flyer programme redemption bookings with
effect from March 23. Other changes to the KrisFlyer programme with
effect from the same day include the removal of a 15 per cent
discount for redemption bookings made online rather than via the
call centre.
SIA’s move, according to analysts, is in line with
similar initiatives around the removal of fuel surcharges announced
by other international carriers in the wake of falling jet fuel
prices.
“With the price of oil having now moved down back into
a more ‘normal’ range, a lot of airlines have unwound their fuel
surcharges, so in some ways this move by SIA and SilkAir is them
joining in line with other carriers at a time when competition is
high. Removing the surcharges makes their pricing more transparent,
and in some ways easier to compare to other airlines that have
either dropped the charges or rolled them into the base fares,”
said Mr Ellis Taylor, Asia Finance Editor at FlightGlobal.
Passengers have been crying foul at the airlines as,
despite lower fuel prices over the past two years, many — including
flag carrier Singapore Airlines — had not lifted the fuel
surcharges as quickly as when they were slapped on almost a decade
back.
According to analysts, fuel hedges, where airlines have
locked in higher prices for fuel, were the primary reason why some
carriers were continuing with their fuel surcharges. Fearing that
oil prices may start to rise again, several carriers retained the
surcharges as a precautionary step given tickets are sold up to one
year in advance.
SIA, however, said that codeshare flights operated by
other airlines may still include the surcharges. Likewise,
redemption bookings on flights operated by other airlines may still
include surcharges. Adjustments are also being made to redemption
award charts in the Saver category for selected zones, while those
for other zones remain unchanged.
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