‘Fuel surcharge adjustments slow to respond to changes in oil prices’

Posted on Dec 08 2008

Adjustments to fuel surcharges are not felt for several months after an increase or decrease in world oil prices, said Kwang Joong Kim, general manager for Asiana Airlines’ Saipan sales office.

Korean Air and Asiana recently announced they are lowering fuel surcharges next month from $44 to $18 on flights to China, Southeast Asia and Saipan, in order to reflect the steep decline in jet fuel prices. Surcharges will drop from $32 to $9 for flights to Japan. The current surcharge of $140 to the U.S. and Europe will drop to $41.

Kim said the government controls the fuel surcharges so they must first get approval before the company raises or lowers prices.

There are a few months of interval time between when prices change and when it is reflected in the fuel surcharge, he said.

As fuel prices continue a steep decline, most airlines have cut or eliminated fuel surcharges. This summer oil was trading at more than $150 per barrel but is now trading at under $50.

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