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Qatar Airways to cut surcharge following oil price drop

Wednesday, January 7, 2015 - 23:00
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Qatar Airways, the gulf state's national carrier, will cut its fuel surcharge following the plunge in crude oil prices, the company's chief executive told reporters on Wednesday.

[DOHA] Qatar Airways, the gulf state's national carrier, will cut its fuel surcharge following the plunge in crude oil prices, the company's chief executive told reporters on Wednesday.

"As far as the fuel price reduction is concerned, there will be no reduction in the ticket fare, but there will be a reduction in the fuel surcharge that we were charging," Akbar Al Baker told a news conference.

He declined to comment on exactly how much the cut would be or when it would be implemented. Mr Al-Baker said the cut would not be directly related to a percentage drop in crude prices of more than 50 per cent since June.

"Please keep in mind that when the fuel price rose to US$100 a barrel and over, the airline was in the negative territory as far as its finance was concerned," Mr al-Baker said.

"So as now the price is going down, the airline will now again get into profitability. This does not mean that if the fuel price went down 50 per cent, we have to start reducing the ticket by 50 per cent."

Airlines in China have cut fuel surcharges in response to lower oil prices. The British government has also called on airlines to pass on the benefits to consumers.

In December, the International Air Transport Association (IATA), which represents around 250 airlines, said falling fuel prices and stronger economic growth means global airlines will report their strongest profit margin in more than five years in 2015.

Airlines' spend on fuel will drop to US$192 billion in 2015, from an expected US$204 billion this year, IATA said.

REUTERS