Aer Lingus to cut fuel surcharges by up to 30% as oil prices now lower

AER LINGUS has decided to cut its fuel surcharges on flights to the United States by up to 30 per cent in reaction to a sharp fall in the price of fuel over the past few months, The Irish Times has learned.

It is understood that Aer Lingus will issue a stock market announcement this morning with details of the cuts in the highly controversial fuel surcharge. It is believed they will range from 20 per cent to 30 per cent and will apply on all of its routes to the US with immediate effect.

The airline currently charges between €75 (for New York, Boston and Washington DC) and €110 (for San Francisco) each way on flights to the US.

Aer Lingus first introduced a surcharge in May 2006, adding €35 each way to the price of flights to the US. Increases to the surcharge were introduced as recently as June and July, to reflect the sharp rise in the price of a barrel of oil, which peaked this year at $147.

Since then, the price of oil has more than halved and Aer Lingus has moved to reflect this. A number of airlines around the world have already reduced their fuel surcharges.

This is just the second time that Aer Lingus has trimmed back the surcharge, the previous time being February 2007. The move is likely to be welcomed by consumer groups.

The airline carries about one million passengers to and from the US each year and the move will knock several million euro off its revenues.

On the flip side, its fuel bill will have been reduced significantly, due to a softening in oil prices recently.

Aer Lingus yesterday announced plans to introduce nine new short-haul routes to its summer 2009 schedule from airports in Ireland.

The airline has begun selling seats on routes from Dublin to Catania in Sicily, and to Sofia and Newcastle.

It will also introduce routes from Cork to Lanzarote, Lisbon and Rennes, while flights from Belfast to Milan, Munich and Lanzarote are being added to its schedule.

This will bring to 12 the number of European routes introduced by Aer Lingus in 2008. It also plans to increase frequencies on 17 other short-haul routes including Paris, Faro, Edinburgh, Barcelona and Malaga.

Aer Lingus's corporate affairs director, Enda Corneille, said the expansion would be facilitated by the introduction of one new A320 Airbus aircraft next April and changes to its existing schedule.

The airline recently axed routes from Dublin to Copenhagen and Riga and is cutting services from Belfast to Nice and Budapest.

Mr Corneille said its short-haul business remains "robust" in spite of the recent economic downturn which has hit consumer demand across Europe.

"It's a challenge but there remains demand in the system," he said. "Our short-haul business model remains very robust . . . We see good growth on these routes."