markas

I to am having a downer on tour operators at the moment. I need 2 flights to Lanzarote next September. I have booked my flight only through First Choice usually twice a year for a number of years.

When I first looked at the price towards the beginning of October they were priced in the low £500's for 2. I have checked these twice daily since 10 October and have seen them go up and down, sometimes changing from morning to evening. The lowest price since then has been £542 on 25 October and they are currently £728!!. Taking the lower fuel prices into account I can only come to the conclusion that this is a complete rip off.

I have suggested to them that this is because of the demise of XL (less competition) and the Thomson merger (reduced capacity) and therefore the need to maximise profits. Needless to say my email has remained unanswered.

Tour operators seem to me at present to be able to have everything their own way. In part I think down to the reducing number of tour ops due to mergers and failing companies. I have given up all hope of customers every getting a straight answer to any queries involving price increases.

I hope you manage to resolve your issue to your satisfaction but I wouldn't be holding my breath!

Sunaddict,

Surely you just highlight that booking early secures you the cheapest seats? I really struggle to justify the term 'rip-off' where in fact you have failed to secure the best prices because you have waited longer to try and get them cheaper.

The simple truth is that prices have to rise, Excel justifies why vast numbers of seats at low prices do not work.

People find it difficult to understand the whole oil price scenario, but you will struggle to comprehend it for a lot longer. Airlines 'hedge' their fuel prices - i.e. pre-book 60% of next years oil at current market prices to ensure they have some financial stability and can plan ahead.

The trouble is that the majority of airlines are currently paying 2-3 times the current market price for their oil (which is less than $50 a barrel I believe?). Ryanair is a classic example. It hadn't hedged in advance when oil was cheap, so got absolutely pummelled when oil went to $150. So it went and hedged 65% of its oil for the year ahead at $130.

Although Ryanair is a funny example as they 'hide' their increase fuel prices, but airlines are not yet benefitting from lower fuel costs as all have gone through similar experiences, and got absolutely blitzed when prices first went through the roof. Only their suppliers of fuel have really benefitted.

Some airlines (Singapore Airlines, Thai) have marginally reduced the Fuel Surcharges on their flights, but they will be with us for quite a while yet.

I struggle to see flights and holidays as 'rip-offs' at any point, as you only pay what you can, what you are happy with, and travel companies only charge what the market can bare. I think people will struggle to accept that we are coming to the end of a 'golden age', and prices must go up, or more companies will go under.

Whether its a rip off or not, and whether we have come to the end of the "Golden Age" I fear that a huge amount of people will not be going on Holiday next year due to high cost and less money in peoples pockets.

Sarah

The topic of how much someone has paid for a holiday is something oft discussed when on holiday. We invariably find someone who has paid more and those who have paid less than us.

Prices go up as well as down and it really is a case of, if, when you booked a holiday, you were satisfied that it was - in your opinion at the time - a good deal.

I can understand how the price of fuel and the surcharges applied may irk, but even the TOs cannot get it right all the time. We all take a gamble when we buy a holiday or any expensive item. Buy now or wait? Will it go up or will it go down. The example of Ryanair shows how easy it is to get it wrong.

Even if the price of oil remains low what are the TOs/airlines supposed to do? If they bought at $130 then that is what they will have to pay. If they drop the surcharge before they have completed the contract then they could very easily go the way of Excel.

Then we would have an even bigger problem!

fwh

Sam

Whether I should have booked early (having not even been able to secure my accommodation at the beginning of October but was just checking flight prices) or not is not the point I was trying to make.
If price fluctuations are due to oil prices which they have to pass on because of buying when high, what is the justification for raising and lowering prices on a daily basis? There are other airlines who have not altered their prices at all during the same period. Maybe their purchasing departments made a better call.

I have to agree with Sarah I think there will be a lot less people holidaying next year. Some tour operators are going to have to be very careful that the market can actually bare some of their prices especially where there are other operators who are charging a lot less.

Hi Sunaddict,

Maybe I misunderstand, but the point I was making in your instance is that price changes on a daily basis might have nothing to do with oil at all, but far more likely to do with Supply & Demand.

Fuel Surcharges aren't as fluid as basic holiday supply & demand, which is why I propose the real reason that your flight prices are changing on a daily basis is down to supply and demand.

British Airways have made (approx) 5 changes to fuel surcharges in a year (up and down), same as most airlines. So therefore your price changes must be for another reason.

Sam

Maybe rip off was not the best expression. Perhaps it would have been better if I had said ‘they are taking advantage of less competition, reduced capacity along with peoples preference to book with a company who is Atol bonded and possibly would prefer day flights'.
I agree that the price fluctuations are more than likely down to supply and demand. It still doesn't make it right. There has always been market forces but prices haven't always changed daily. I could almost have sympathy with them if the reason was down to oil prices.

I think that probably our January flight with First Choice will be our last. Summer season 09 sees the mirroring of the booking systems and consequently of the prices. I just feel that all the mergers are not good long term for the customers. If all the company's flights were constantly changing and were as expensive then probably I wouldn't hold the view I do but as there are other cheaper comparable flights around I think I know what I'll be doing.

The initial question raised was
''.....a surcharge is applied to a holiday when costs dictate that the company would make a loss, therefore an addtional one off charge is implemented to cover such loss....''
Therefore, if the surcharge is not now needed it gets removed. yes?
Thomas Cook implemented £20 PP fuel surcharge in August on top of my booked holiday to Ibiza for August 09, as they stated they required to do this due to high crude oil costs.
As the cost of fuel has dropped, TC has subsequently dropped its surcharge to £5 PP for the exact same holiday.
A surcharge is not classed as part of the holiday, that is why it is deemed an extra (ie surcharge!).
Therefore, as the holiday has not been taken, or paid in full, surely by law they should amend the surcharge to what they are charging now. If fuel costs escalate again, there is nothing to stop them increasing the surcharge as that is written in their T&C.
When Mr Brown, decided to increase passenger duty a few years back, we all got hit with £5 surcharges quick enough!!

Mark

OK, how about this.

When it brochured your holiday it predicted fuel would be say, £60 for your holiday, which it built into the cost of your holiday - (figures irrelevant).

However fuel prices increased, so as it hedged ahead so the cost of the fuel for your holiday is £100, so it charges you a £40 Fuel Surcharge. It has in effect agreed to pay £100 in fuel for your holiday to the oil companies.

Fuel prices are now dropping. All the oil it has agreed to buy at £100 from the oil companies has now been used by it's customers (like you). It's now hedged at £80, so Fuel Surcharges are lowered by £20, and people booking the same holiday pay £20 less than you did for exactly the same thing.

The impression I get is that everyone thinks that companies are profiteering from fuel surcharges. The surcharge you paid covered the cost of the cost of the oil that directly reflects what they paid when you booked. Hardly anyone is actually paying the $50 a barrel price, and many at still paying $130.

Right!
Fuel is bought in the previous fiscal year by most major airlines, this is well before any large DERV increases.
I booked my holiday in August 08 and was charged £20 PP fuel surcharge (understandable at the time).
In October 08, Thomas Cook reduced the fuel surcharge to £5 PP, 6 weeks after initial booking and when fuel costs were higher!
......Now to me, that looks like the TO discounting to get bookings as the market slowed down due to the credit crunch, because it definately isnt because fuel has dropped by almost 70% per barrel.......
I am not asking for my holiday to be discounted by the £140 extra it is advertising now, I just want the stealth supplement to be amended within line of current pricing.
Seeing my holiday isnt for another 9 months, my ''fuel'' hasnt been spent yet. No doubt if fuel returns to a high level, TC will be looking to charge additional surcharges (this is mentioned in T&C).

Mark

Depending on how much deposit you paid - almost sounds like you could cancel and rebook at the cheaper price. Even with the loss of deposit, it might work out cheaper........

There again, OPEC may slash production, force up prices, then you get hit with more fuel supplements because you only paid £5 FS not the £60..........

John.

Funny enough I was speaking to my brother yesterday (Captain on Easyjet) and a letter has gone round asking everyone to tighten their belts because they bought in the fuel previously at a higher price and the price has now dropped.

It is as well to note also that apart from fuel users hedging their fuel costs at previously high oil prices, the exchange rate is now very poor. This will hold fuel surcharges at current levels for a while yet.

Oil is paid for in US Dollars. At $150 a barrel and an exchange rate of GBP/USD 2.0000 a barrel would cost £75.00. At say a hedged cost of $100.00 a barrel but at GBP/USD 1.40 it will still cost around $72 dollars a barrel. Not much room for getting rid of surcharges.

The point is that now TC are either NOT charging any fuel supplement at all, or just a nominal £5 PP
This is for the SAME holiday, on the SAME flight, on the SAME date..........
The question now lies with the question, are supplements/surcharges just another way to ofset discounts?
The credit crunch hadnt hit strongly when I booked (1 year in advance), & fuel supplement was £20 PP due to increasing costs
The same holiday has now got larger discount (presumably low bookings due to the credit crunch), & fuel supplement @ £5 PP

Point 1. supplements are meant to be extra when increased costs could not be met
Point 2. as the holiday flight was booked 1 year in advance, supplement had to be calculated for the worse scenario
Point 3. still over 8 months to holiday, new supplement policy has dropped additional cost on new bookings
flight hasnt gone, fuel has not been used therefore additional cost not incurred
Point 4. I have only paid deposit, so no refund required, just amendment

The supplement charging is a form of provisioning for non costed overheads. I work for a Finance Company, and we do this all the time, but we dont charge our customers extra. It is all part of the interest charging/initial price.
When fuel was £1.30 a gallon at the petrol station, then dropped to £1.20 your garage didnt say they had to charge at the higher price because they bought it when costs were high. They provisioned. They make money when prices go up & they buy at low, but loose when it goes the other way. 6 of one, 6 of the other. Thats provisioning & it balances out.

I just see this as a way for TC to reclaim some of the discount they gave me, but are now panicking because they cant fill a holiday, that is usually 75% full by December for August 09.

TC wont budge, & if I hadnt paid full deposits, would consider cancelling & booking elsewhere. They know that I wouldnt be able to swallow a £480 loss & get a cheaper holiday, so wont budge!

Mark