Will industry reinstate fuel surcharges?
Published Tuesday, April 27th 2010 - Updated Tuesday, April 27th 2010
Categories
We have all been very lucky thus far with cruise lines slashing prices and holding off on implementing the ever dreaded fuel surcharges. The price of oil has been well above the "line in the sand" drawn by the cruise lines and I myself have been wondering when this would happen. Typically once one line makes a change, the rest follow suit. We've seen that recently with the cruise fare price increases - fuel surcharges are just a matter of time.
... Eileen
... Eileen
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By: Johanna Jainchill
April 27, 2010
TravelWeekly
By: Johanna Jainchill
April 27, 2010
TravelWeekly
Two words are giving travel agents a reason to brace themselves: fuel surcharges.
British cruise operator Fred Olsen Cruise Line yesterday said it was reinstating the supplement May 5, citing the high cost of Brent crude oil, which yesterday reached $85 per barrel.
North American cruise lines have made no such announcements, but the possibility that they could is not lost on travel sellers, who complain of having to collect the fees without getting commission for them.
The cost of light sweet crude oil, which most cruise lines use, is also just shy of $85 per barrel, according to the New York Mercantile Exchange Index.
When the cruise lines eliminated their fuel supplements, they established fuel price thresholds at which they reserved the right to reinstate the surcharges.
For Norwegian Cruise Line and the brands of Royal Caribbean Cruises Ltd., it was $65 per barrel. For the Carnival Corp. lines, it was $70.
Still, crude prices are low compared with the dog days of 2008, when cruise lines were among many companies that collected supplements as crude oil reached record prices of $145 per barrel.
David Bernstein, CFO of Carnival Corp., told analysts in the company's second-quarter earnings call in March that while the company reserves the right to reinstate the surcharge, "we will continue to monitor the situation, review it, but we have no present intention to reinstate it."
British cruise operator Fred Olsen Cruise Line yesterday said it was reinstating the supplement May 5, citing the high cost of Brent crude oil, which yesterday reached $85 per barrel.
North American cruise lines have made no such announcements, but the possibility that they could is not lost on travel sellers, who complain of having to collect the fees without getting commission for them.
The cost of light sweet crude oil, which most cruise lines use, is also just shy of $85 per barrel, according to the New York Mercantile Exchange Index.
When the cruise lines eliminated their fuel supplements, they established fuel price thresholds at which they reserved the right to reinstate the surcharges.
For Norwegian Cruise Line and the brands of Royal Caribbean Cruises Ltd., it was $65 per barrel. For the Carnival Corp. lines, it was $70.
Still, crude prices are low compared with the dog days of 2008, when cruise lines were among many companies that collected supplements as crude oil reached record prices of $145 per barrel.
David Bernstein, CFO of Carnival Corp., told analysts in the company's second-quarter earnings call in March that while the company reserves the right to reinstate the surcharge, "we will continue to monitor the situation, review it, but we have no present intention to reinstate it."
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