# O'Leary "guarantees" no fuel surcharge



## autumnleaf (10 Aug 2006)

On the radio this morning, Michael O'Leary guaranteed that Ryanair would never introduce a fuel surcharge. But if the price of fuel continues to rise, surely this has to be passed onto the customer somehow if the airline is to continue to make a profit?
I realise that airlines are not as vulnerable to price updates as, say, petrol pumps. They can buy in bulk when the price is low and they don't pay any tax on fuel. But if there are no "dips" in the price of oil, it will catch up with them eventually given the large volume of fuel involved. 
I suspect that the baggage charges are at least partially a response to rising oil prices. Not only do they get extra money from passengers, but they encourage travelling light which means less weight and less fuel required to lift the weight. So Ryanair already has a fuel surcharge - it just calls it by a different name.


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## ClubMan (10 Aug 2006)

_Ryanair _are generally a dab hand at hedging fuel costs. Perhaps they have done this again allowing them to give such guarantees? Don't forget that some other airlines have introduced baggage charges *and *still levy fuel surcharges.


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## SidTheDweeb (10 Aug 2006)

Can they not increase the average cost of a seat?


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## Howitzer (10 Aug 2006)

SidTheDweeb said:


> Can they not increase the average cost of a seat?


 
It appears the low cost model is to increase the number of seats sold per flight. Currently 90% I believe.

Ryanair have just recently hedged oil at $74 for the winter.


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## conor_mc (10 Aug 2006)

SidTheDweeb said:


> Can they not increase the average cost of a seat?


 
That's exactly it.

The whole concept of a fuel surcharge is a fallacy anyway, and all O'Leary is doing is making PR hay out of other airlines attempts to keep "fares" low while increasing turnover. Fuel is an intrinsic cost in any airline, so trying to "surcharge" for it is a joke. It's not like its a discretionary surcharge, where the punter has a choice to pay an extra €2 for purchasing by Visa as opposed to Laser card, for example.

It should be part and parcel of the fare, same as a train fare or a bus fare.


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