Many of the world's major cargo carriers have given in to the inevitable after a rise in the fuel price index by announcing fuel surcharges on their rates, effective from 1 February.
Among the airlines which added surcharges in late December were Lufthansa Cargo, Air France, Cargolux, KLM/ Alitalia, SAS, United Airlines, American Airlines and FedEx. Most went for a rise of 10ó or c0.1 per kilo across their networks, but United and American imposed lower domestic surcharges. FedEx increased most shipment by 3%.
Fuel surcharges are an accepted practice in air cargo, although that does not stop them being unpopular with forwarders and shippers. The last time they were imposed en masse - in November 1996 - there were complaints that not enough notice was given. Then, some carriers, including Lufthansa, the world's largest international cargo carrier, imposed rises with as little as a week's notice. This time, most were careful to give at least a month's warning.
In 1997, following the row over the 1996 surcharges, the International Air Transport Association (IATA) created an index based on the fuel price in June 1996 as 100, agreeing that when the index rose above 130, carriers could impose surcharges. At the end of December, the index had reached 136, following a 50% rise in kerosene prices last year. The growth has accelerated, with prices up 30% since August.
Lufthansa has announced that it will remove its surcharge when the IATA index falls below 110 for two weeks running. In 1996-7 it removed surcharges after five and a half months.
Source: Airline Business
