British Airway's broke new ground earlier this weekend when they announced that they would begin to tier fuel surcharges based on cabin. Passengers will now be charged £109 for economy, £121 for World Traveller Plus and £133 in Club World and First Class.
Fuel surcharges are nothing more than price increases. While it tends to be manipulated as fuel rises, there is no magic formula out there that dictates the fuel surcharge based on fuel costs. It actually only recoups a small portion of the costs.
The significance of this move is the impact it has on corporate contracts which account for a large portion of BA's Club World traffic. Corporate contracts are locked in at an agreed price. Some fluctuate based on the J rack price. However, many of the company's are also responsible for the fuel surcharge even if its increased during the contract period. So the premium targeted fuel surcharge increase indicates they need to get the corporate contract rate up.
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