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Article - Virgin America Adds Fuel Surcharges
Redaction: Aloha Article Previously Posted
Virgin America Adds Fuel Surcharges
Jun 12, 2008
By Andrew Compart/Aviation Daily
Virgin America yesterday joined a long list of U.S. carriers that have padded their fares with fuel surcharges, adding fees of $10 each way for short-haul and $25 for long-haul markets.
The airline called the charges necessary to protect it against “volatility” in oil prices.
Virgin America is particularly vulnerable, even with its newer and more fuel-efficient fleet, because it has no fuel hedges in place. An airline spokeswoman attributed the lack in part to the airline’s difficulty in getting certification to fly. “It was not practical to hedge fuel during the certification process because there was no date certain for launch,” she said. “And by the time we launched, fuel prices had risen considerably, thereby making a hedge not financially feasible.”
In justifying the surcharge, the airline said the average fuel cost per passenger for San Francisco-New York service has risen from about $170 when it started service in early August to $213 in January and $324 today. For San Francisco-Los Angeles, the cost has climbed from $38 at the start of service to $48 in January to $73 today.
In addition to the surcharge, the airline on June 6 hiked several fees to help offset the fuel price increases. These include raising the change or cancellation fee for coach customers and the unaccompanied minor fee from $40 to $75 and doubling its overweight baggage fees.
The spokeswoman said the airline will keep a close eye on its growth plans, but so far the fuel prices are not stopping it from adding services. On the day it added the fuel surcharge, the airline also announced new service between New York Kennedy and Las Vegas, starting Sept. 4, and it still is hoping to secure government approvals for added service from San Francisco and Los Angeles to Chicago O’Hare this year.
Redaction: Aloha Article Previously Posted
Virgin America Adds Fuel Surcharges
Jun 12, 2008
By Andrew Compart/Aviation Daily
Virgin America yesterday joined a long list of U.S. carriers that have padded their fares with fuel surcharges, adding fees of $10 each way for short-haul and $25 for long-haul markets.
The airline called the charges necessary to protect it against “volatility” in oil prices.
Virgin America is particularly vulnerable, even with its newer and more fuel-efficient fleet, because it has no fuel hedges in place. An airline spokeswoman attributed the lack in part to the airline’s difficulty in getting certification to fly. “It was not practical to hedge fuel during the certification process because there was no date certain for launch,” she said. “And by the time we launched, fuel prices had risen considerably, thereby making a hedge not financially feasible.”
In justifying the surcharge, the airline said the average fuel cost per passenger for San Francisco-New York service has risen from about $170 when it started service in early August to $213 in January and $324 today. For San Francisco-Los Angeles, the cost has climbed from $38 at the start of service to $48 in January to $73 today.
In addition to the surcharge, the airline on June 6 hiked several fees to help offset the fuel price increases. These include raising the change or cancellation fee for coach customers and the unaccompanied minor fee from $40 to $75 and doubling its overweight baggage fees.
The spokeswoman said the airline will keep a close eye on its growth plans, but so far the fuel prices are not stopping it from adding services. On the day it added the fuel surcharge, the airline also announced new service between New York Kennedy and Las Vegas, starting Sept. 4, and it still is hoping to secure government approvals for added service from San Francisco and Los Angeles to Chicago O’Hare this year.
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