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September 2005 issue

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Charges rise to meet increasing fuel costs

A number of airlines have increased fuel surcharges on passenger tickets in order to offset the costs of rising fuel prices, in a move reminiscent of the price hikes that occurred last year for similar reasons (see Language Travel Magazine, November 2004, page 8). In June this year, oil prices rose to US$60 a barrel and high costs and potential further increases are predicted to continue throughout the rest of the year.

British Airways announced in July that the fuel surcharge for long-haul tickets sold in the UK would increase to UK£24 (US$44) from UK£16 (US$29), while the surcharge for short-haul flights would increase to UK£8 (US$14.50) from UK£6 (US$11). Virgin Atlantic, Lufthansa, Singapore Airlines and Swiss International Airlines have also announced increased fuel surcharges for passengers and a number of other carriers are expected to follow suit. A spokesperson for Virgin Atlantic said, We had hoped to avoid increasing the surcharge, but the rising price of oil has left us with no choice. Singapore Airlines' surcharge rose from US$30 to US$45 on some flights out of the country.

The high price of oil is expected to continue as fuel demands from China, India and the USA continues to rise. According to Iata, the global airline industry is likely to face losses of US$6 billion this year, up from US$4.8 billion in 2004, as a result of spiralling fuel costs. European air traffic also grew by six per cent in the January to April period, compared with the same months in the previous year, increasing European air carriers' reliance on imported fuel.

Easyjet shows strong growth

UK-based low cost carrier Easyjet has announced an increase in passenger numbers of 21.9 per cent to 2.55 million, compared with figures for the previous year. The airline has expanded aggressively into Europe over the last 12 months although it remains under pressure due to rising oil prices and its policy of not introducing fuel surcharges in order to keep the cost of passenger tickets low.

Exhibiting a clear intention to continue with its expansion plans, Easyjet announced five new routes from Belfast airport in Northern Ireland in July. Passengers can now fly from Belfast to Inverness in Scotland, Geneva, Rome, Berlin and Palma in Mallorca. An additional new route to Faro in Portugal, originally intended to be running for the summer period only, will also now run year round.

Chief Executive of Easyjet, Ray Webster, said, We are delighted with the response to these new routes, which further proves the great demand for direct low-cost travel from Northern Ireland. Easyjet has launched 10 new routes from Belfast in the last 12 months and recognises the potential for further development from the region.

Webster also recently announced plans to step down later this year, earlier than expected, while Easyjet's founder Stelios Haji-Ioannou is to rejoin the board.

Flights expand between US and China

Continental Airlines has announced plans for a new daily non-stop service from New York to Beijing, which will make it the first US passenger airline to initiate flights to China in nearly 20 years.

United and Northwest airlines have been the only two US carriers to serve the Chinese market in the previous 20 years and the new New York-Beijing route is the only non-stop service between New York and mainland China to be operated by a US carrier. American Airlines also won federal government approval to start services to China earlier this year.

The Beijing-New York route is part of a wider expansion programme by Continental, which has launched six new transatlantic flights since May this year. Intense competition with low-cost carriers within the USA has forced many US carriers to seek out new international routes and find alternative ways to achieve profitability.

Travel Update

British airline bmi has announced it intends to fly from London to Riyadh in Saudi Arabia from this month. British Airways suspended its services to Riyadh and Jeddah in March, citing lack of demand. Chief Executive of bmi, Nigel Turner, confirmed that the carrier would be the only British airline operating the route.

Commercial flights out of Iraq are to resume after 15 years of sanctions, which isolated the country. Sulaimaniya Airport in northern Iraq was also scheduled to reopen in the summer.

Hungary's Wizz Air is moving into Bulgaria, with new flights from Budapest to Sofia. Our aim is to become the single biggest airline in the country in three years, said Joszef Varadi at the airline.

SmartWings in the Czech Republic is launching a service from Prague to Milan this month. Milan joins Rome in the low-cost carrier's route list.

Virgin Atlantic has reported a 26 per cent rise in its business travellers in the last financial year, which it has attributed to more seats available due to new aircraft; a partial recovery in the business travel market; and its upper class service winning market share. The airline has also announced it is hiring more staff, as new routes to Dubai and Jamaica start next year.

An airline in Bosnia has resumed services after going bankrupt two years ago, following a settlement reached with a bank. Air Bosnia is to rebrand as BH Airlines and launched flights to Spain earlier this year. Services to Turkey, Switzerland and Germany are due to follow.

Sydney will not get a new airport, the Australian government has ruled. Transport Minister John Anderson told parliament that the existing airport would cope with an expected increase in air traffic.

Sri Lankans can now fly direct to China, thanks to the launch of a direct Colombo – Beijing service from Sri Lankan Airlines. The route was launched to attract more Chinese to Sri Lanka. Tourism from China to Sri Lanka has been increasing steadily since we were granted approved destination status in 2003, said Anura Bandaranaike, Sri Lanka's Tourism Minister.

Toronto in Canada has unveiled a tourism branding project to attract more visitors to the city. Tourism is the second most important industry in the city after banking.

Brazilian low-cost airline, Gol, is planning to move into the Mexican market with the launch of another low-cost carrier. We believe that the Gol concept and business model can be successfully established in the Mexican market and produce benefits for all segments of the population, said Constantino de Oliveira Junior at the airline.

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