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AER LINGUS EXPECTS to reap a €50 million-plus windfall this year from falling oil prices but has no apparent plan to give long-haul passengers any relief on its fuel levies.
The airline has been accused of gouging fliers on its lucrative transatlantic routes for failing to pass on its savings from plunging fuel costs – despite being quick to jump on any price rises in the past.
The airline’s fuel surcharges on many long-haul flights remain at the same levels set in mid-2008, when oil was trading at nearly 3 times the price it has been since December.
Aer Lingus, which is nearly 30% owned by Ryanair with another 25% in taxpayer hands, introduced a series of hikes to its fuel surcharges in that year after what it described as a “record upsurge of oil” over the earlier weeks.
The global oil price shot up to about $140 a barrel midway through 2008, but it is now trading at nearly one-third of that – about $50 a barrel.
The price of jet fuel very closely tracks the crude oil price and it has also plunged over the past 4 months on the back of a global glut in production.
Meanwhile, passengers on return flights from Dublin or Shannon airports to the US east coast now hand over €150 for the surcharge, while those flying further afield pay up to €216 on a return ticket.
The fees to cities like New York, Boston, Washington or Chicago remain at the same level they were in July 2008, when the oil price hit historic highs.
Fueling windfall profits
Earlier this week, Aer Lingus said it expected to save €52 million on its 2015 fuel bill because it had been able to buy 40% of what it needed for the year ahead at a heavy discount on the figures it had been using for its financial forecasts.
It bought the latest share for over 25% less than what it was paying before October, at which stage it had already locked in prices for 50% of the fuel it needed for this year.
Fuel costs make up about one-quarter of all the airline’s running expenses and the €52 million saving could add double-digit growth to its bottom line.
The airline on Friday knocked back a second buyout offer from British Airways parent IAG which valued the company at €1.28 billion. It recently said it expected its 2014 profits to be ahead of the €61 million it delivered in 2013.
No price cuts unless forced
Consumers’ Association of Ireland chief executive Dermott Jewell said there was an “urgent need” for companies like Aer Lingus that were reaping the benefits of low oil prices to pass savings on to their customers.
“The efficiency with which price increases are rolled out is breathtaking – so it beggars belief that there is a complete absence of even discussing a reduction in prices now that they have the opportunity to do it,” he said.
You definitely come away with the clear understanding that they are doing nothing unless they are forced or embarrassed into doing it.”
When asked if Aer Lingus had any plans to cut its fuel surcharges in line with the drop in oil prices, a spokeswoman said the company would only “continue to monitor the situation”.
“Aer Lingus hedges fuel costs in advance so market benefits take some time to realise,” she said.
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The same can be said for electricity and gas prices..
It’s not just Aerlingus that’s making a killing, Ryanairs prices are more expensive than last year why?
Ryan air are still the cheapest around
Who is the cheapest then?
Ryanair are the cheapest around but their UK customers get a far better deal with much lower fares. Why? Because they have a lot more competition in the Uk then they do in Ireland
I suggest people who think Ryanair are cheaper check summer flights Aer Lingus are cheaper. 120 cheaper for two adults to Twnerife last week in fact.
Ryanair hedged on oil prices and are locked into that hedge price. They were cheaper when everyone else was paying more.
You are not hedged into prices. The whole point of Ryanair getting nice is for profit and compete with the likes of Easyjet and Awr Lingus abd increase fares per passenger.
Forgot to say not locked into oil prices.
CIE, Irish Rail and most private bus companies have also hiked their fares in recent years, citing fuel costs as the reason. Funny how they’re never too quick to lower them when oil prices bottom out?!
Dublin bus fares have risen a staggering 40% in the last 2 years they say because of fuel costs.
If a barrel of oil is only 50 dollars do you not think petrol should be only around 1€ a litre or is that c%nt from mayo robbing us on tax again.
The tax in petrol/diesel was set prior to this governments election. Can’t blame them for everything.
Very true… But there is nothing stopping them reducing the tax take since they came into government??? As per their election promises?
Maybe the rather large 8billion annual deficit is somewhat effecting their ability to reduce tax
Don’t remember that promise
That deficit didn’t stop them from not negotiating a fair deal on bailout and with bond holders…
And they hiked them again just before Christmas while fuel prices had come down.
Fintan, are you under the impression that if we didn’t pay the bond holders our deficit would disappear?
They knew that before entering government, yet still made the promise.
Just shows the toothlessness of consumer and competition authorities and the way all companies contemptibly treat their customers.
Very similar to how the whole country is governed
Vote with your feet.
An ageing dinosaur rumbling along cluelessly.
They did the same to customers on short hops in the 70′s and 80′s. Some competition would help. The sooner Ryanair go transatlantic the better.
Soooooo, Ryanair, British Airways, Air France, Iberia, Lufthansa, United…..in fact ALL airlines must be aging dinosaurs because NONE of them are reducing their file surcharge!!!!
You’re in for a shock as Aer Lingus are one of the few profitable legacy carriers remaining in Europe! They’ve have an impressive stack of cash in the vaults, they have undergone a massive turnaround in order to make themselves efficient and profitable and for the record have been placed very valuable in the market so the likes of Etihad and IAG (owners of BA & IB) are very interested in buying into them!
The only ageing dinosaur here is you I’m afraid!
Hahahaha. You believe any of their promises? The sooner the better the Mayo Micky goes back there premantely the better for aireland!
The EU should step in and write a law that fuel must be included in the quoted ticket price…
It’s absolutely absurd that the plane journey and the fuel are allowed to be considered as sold separately or subject to an additional fee.
Dublin to sanfrancisco
12-14th may
Aerlingus DIRECT – 872
United with a NINE hour layover in Newark
791
So for 80 euro extra you fly direct rather than connection time of over 9 hours!
This means journey time of 11 hrs with aerlingus or over 20 with United
Yeah, EI have the market cornered, their load factor is good & numbers are up.
They have little competition & little motivation to reduce prices (sadly).
I think for the price that Aerlingus charge in general on many Aerlingus long haul flights even with the fuel charge is better on many occasions than their competition.
To say there are always more expensive is completely untrue and completey unwarranted as I have given evidence below.
On three dates secured only once was Aerlingus more expensive by a mere 80 euro to San Fran, and being in mind the other carrier who offered the lower fare had a NINE hour wait in the states first, I don’t think anyone would mind paying 80 euro extra to fly DIRECT
Aer Lingus are way more expensive on transatlantic routes then any of their competition
Random date selected and over 130 euro cheaper to fly Aerlingus so guess that statement is incorrect
12-14th may aerlingus 630 euro Rtn dub-Jfk
12-14th may American 734 euro Rtn dub-jfk
Yep, if you’re looking for bargain travel to the US, don’t go direct. Go through LHR/FRA/AMS and you will save around €160 over Aer Lingus.
I’m going British Airways Via London in May from Cork to West coast of North America for €505 return. Hundreds cheaper than flying with Aer Lingus and even more when you factor traveling to Dublin and staying over to catch flight times!
Marc, it’s than not then.
Surely the government should look at the possible 320 million windfall to the tax payers through their share of the sale of Aer Lingus.
The sale of the national lottery came in around 405 million euro.
Between both of these sales and the retention of the Universal Social Charge, which brings in approx. 1.6 billion, surely we can make a large dent in the national deficit
Frank and what about next year when spending outstrips income again and the deficit increases? What do they sell to plug that gap than
4.6 Frank, and WAyne do you suggest that the gov take all our wages as long as their deficit keeps growing. If the deficit isn’t being reduced then this gov are total wasters, given the money they have stripped from every tax payer already.
Hard to reduce a deficit when your expenditure outstrips your income.
Aer Lingus has not performed and has not returned a dividend to the Government worth stalking about in years. Even if the make a profit this year, what dividend can we expect as a state ? 20 to 25 million max.
To sell the stake allows us to take a lump sum off the deficit, reducing the interest due in the debt.
This will reduce the deficit for next year and future years if this government and successive ones manage the budget better.
Fergus
That statement is completey untrue.
Random dates flying to JFK 1st going out 2 return
Aerlingus 672 euro
Ba from heathrow 1096 (sterling) PLUS your fare to heathrow not included
Heathrow has some of the highest levels of pass wher charges in the world, so I completely disagree with that comment
Gary, using flight scanner or ebookers 9/10 I can get cheaper flights with better all round experience than booking EI flights.
Went Cork to San Francisco in 2012 return with BA via London for €560 all flights included price in euro. Had 2.5hrs in London to connect but would have taken that item to drive Cork to Dublin airport anyhow. That price is €325 cheaper than your San Francisco Dublin Direct price quoted elsewhere.
My mother in law just flew Dublin – SFO direct for €650 return. To make going via LHR attractive LHR route would want to be about half that. Which isn’t possible. And that’s forgetting all the extra travel time and possible layover as well as Immigration pre – clearance. Queuing up with 1000′s from the rest of the world in the Hall off a LHR-SFO flight and watching AL passengers skip by is a big factor for me. …
I regularly fly to the US and BA via London is generally cheaper…
I booked a ticket from Dublin to San Francisco via heathrow with BA for €549, with Aerlingus direct it was just under €900.
“Aer Lingus hedges fuel costs in advance so market benefits take some time to realise,” she said. That’s a clear explanation at the end of the article, case closed.
Again
Both dates 12-14th may, this time dublin. To Chicago
Aerlingus return (same airports) 712,16
American Airlines 1551.58
Over double to fly with Anerican , so again statement mentioned in incorrect
Buy as much heating oil etc as you can. These prices are going to sky rocket later this year.
Why are they?
Because this happens every 20 years or so, 85, 95 and now 2015… And then they shoot up after 6 months.
Roughly 20…
DUB-SFO 1-15 Sept. Aer Lingus €781 BA Inc DUB -LHR €498
Think you may be fibbing a little there! Cheapest going is €614.14 with BA with a single change at LHR (slightly cheaper fare was available if you flew to London City than dragged all you’re luggage across london to Heathrow which is just madness).
Aer Lingus came to €781! So to be honest, if you’re paying for a direct flight WITH pre clearance I thing it’s a bit of a bargain!
Not fibbing. Check out Skyscanner.
DUB – NYC Direct. 1-15 June. Aer Lingus €558, United €509
Well we can go through the whole years prices if YA want, the point I’m making is you statement saying there always more expensive is untrue..like every business in the world sometimes prices will be higher
Gary I just took two random dates. I agree that EI have a good product but I do think they are overpriced. Just my opinion.
Just booked a flight to St. Lucia. That’s an airport code that would upset some up north.
St Lucia (UVF)
I heard we’re in for a soft landing.
The last time oil was $50 a barrel was in May 2009. Diesel was 100.9c and Unleaded was 108.8.
Oil is currently $50 a barrel and Diesel is 120.9c and Unleaded is 129.9c.
We’re getting shafted.
Fly me to the moon and let me walk amongst the stars…
As the tickets seem that expensive to me anyway lol.
have your say