V-Flyer

Have heard general rumour of a mighty fuel surcharge increase this autumn,(for flights booked after october) in general not just Virgin. [n]
(a colleauges discussion with a travel agent)

Is there any truth or ideas on what this could be [:?]

Fuel cost history month by month can be seen here.

The current iata jet fuel index shows the comparison with 1 month ago and 1 year ago.

If you consider that the fuel cost has doubled in the last year and that a year ago fuel was almost 30% of Virgins operating cost it is very likely that fuel surcharges will increase in the short and long term.

In the medium term there is some speculation that oil price is driven upwards more by speculation than by shortage of supply. If that is so, then there are only so many tankers that can hold the speculation. That could mean a drop in oil price.

Many airlines will have hedged their fuel purchase - Virgin included - effectively they are now paying just a little more than last years price, perhaps 10-20% more rather than 100%. But that cannot last for much longer.
Airlines without a hedged position are in deep s**t - they are the ones that are very vulnerable. Others may see some predatory opportunities.

He's been quoted at additional £500 per flight on flights over 10hrs..? Sounds like a marketing spin- 'but if you book before Oct for next year, you won't have to pay this....'
Trying to entice him to Virgin direct and join them up to FC...So can get some more miles!

Originally posted by northernhenry
He's been quoted at additional £500 per flight on flights over 10hrs..? Sounds like a marketing spin- 'but if you book before Oct for next year, you won't have to pay this....'
Trying to entice him to Virgin direct and join them up to FC...So can get some more miles!

He may well have been reading the black side of IATA's forecast.
Even then £500 on a Y flight is probably unsustainable.
The IATA forecast paints a dismal picture for business revenue as well!
Full IATA presentation

There is a brighter side however!

Edit: Note the IATA report is some 4 weeks old - and current movement is still towards higher costs.

The one thing to remember is that once fuel prices reach a certain point things will start to crumble pretty quickly, worldwide recession etc, as I have said before, give me some money and I would be shorting oil right now.

You don't need money to short things - shorting gives you money!