LIAT explains airfare cost

May 14, 2009 News

Regional airline, LIAT yesterday said the airfare travellers are paying, represents the cost LIAT charges as well as various government taxes.
“As an example, the fare on one of the LIAT routes is as follows – base fare US$132, representing 64 per cent of the total fare, surcharge US$23, representing 11 per cent and taxes US$50 representing 24 per cent,” Corporate Communications Manager Desmond Brown stated in a press release.
“On another route, the base fare is US$166 representing 62 per cent of the total fare, surcharge US$21 or eight per cent and taxes US$80 or 30 per cent of the total fare,” he noted.
Brown went on to explain that LIAT’s base fares have increased by less than 20 per cent on most routes over an eight-year period, adding that while fares have increased on some routes, they have declined on others.
In 2003, in the wake of increasing fuel prices, he said LIAT introduced a US$5 fuel surcharge on all tickets. Since then, there have been various increases in the surcharge based on increases in fuel costs over the years.
“The biggest jump in the surcharge occurred in 2008 when fuel prices were skyrocketing to over US$100 per barrel,” Brown said. “Based on lower prices for oil on the world market, LIAT’s management took a decision to implement a partial removal of the fuel surcharge and on January 5, 2009 the surcharge was reduced by US$7.
“For the past six months the surcharges have been reduced by US$10,” he added.
Brown also pointed out that while the price of crude oil on the world market has declined sharply, the price for jet fuel has moved at a somewhat slower pace. This week jet fuel is being sold at US$67.40 per barrel, 11.1 per cent higher than a week ago and 7.2 per cent more than it did a month ago.
The LIAT official said that in recent times, all airlines have implemented fuel surcharges, noting that in competitive markets, the surcharge has now been mostly eliminated but base fares have increased during the same time period to cover incremental costs in the industry.
In addition, Brown pointed out that fuel cost, though significant, was not the only cost element affecting LIAT’s operating costs.
“Between 2007 and present, LIAT has faced increases in many critical operating costs including aircraft engines, spare parts, ground handling contracts, airport fees and charges,” he said.
“Many of these operating costs are higher say than for a typical North American carrier due to the short haul distances between the islands and the frequency of landings for each aircraft. Our operating costs are high, largely due to our complex route structure.”
The Corporate Communications Manager said that LIAT remained cognisant of the need of its customers and the carrier has developed programmes such as “Just Go” where passengers may obtain specials which are available online at www.liat.com.
In addition, he said that LIAT routinely has special promotions, which are advertised throughout its network.
“Of special note are strategic initiatives which LIAT has implemented with several regional tourism associations to encourage travel, such as the recently concluded “One Dollar Fare” promotion which was made available for cricket fans travelling to Barbados in February and March 2009,” Brown said.
“To date, face-to-face meetings have been held with several regional tourism agencies to develop other initiatives geared towards stimulating regional travel. LIAT expects the public to benefit substantially from these dialogues,” added Brown.

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LIAT explains airfare cost

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