According to the latest data from the International Air Transport Association (IATA), the average weekly fuel price ending March 27 was $195,19 per barrel, while on February 27 it was $99,4 per barrel. This means that the price has increased by about 96,4 percent and has almost doubled in just four weeks.
The sudden growth is caused by geopolitics tensions in the Middle East, supply disruptions and global fluctuations oil price. Analysts warn that such price increases will directly affect the operational costs of airlines, and ticket price increases and fuel surcharges for passengers are already being announced.
The director of the National Association of Tourist Agencies of Serbia (YUTA), Aleksandar Seničić, points out for Biznis.rs that the drastic increase in the price of fuel will certainly affect the increase in air ticket prices. This will lead to fuel surcharges for arrangements that have been contracted and tickets that have already been purchased, while for future flights the price increase will be incorporated into the basic price.
How does the surcharge work?
"All companies, especially when operating charter flights and organized groups, have a clause in their contracts that allows price correction in the event of a significant increase in fuel prices. Usually five to ten percent is tolerated, but beyond that the company can and has the right to increase the ticket price through a fuel surcharge. This is the so-called IQ tax," says Seničić.
As he explains, surcharges are rarely applied to individual passengers, except in the case of a drastic increase in fuel prices, so it is now expected that this jump will spill over to them as well, because otherwise the airlines will have big losses.
"The only thing that does not apply to air transport is the Consumer Protection Act, they obviously have no obligations and behave like a cartel, and we can't influence that. The problem for travel agencies is that the law stipulates that the traveler, if there is an additional payment of any kind within the price of the arrangement, and in this case for fuel, conditionally speaking, he has to accept it and we don't need his consent if that price is up to eight percent of the total price of the tourist trip. So, if the arrangement paid 1.000 euros, if that price increase of 80 euros, we basically do not have to have his approval, we just inform him that he has to pay extra and he is obliged to do so", explains Senicic.
Cancellation and low cost
The traveler has the option to cancel the arrangement, but in that case penalties are applied in accordance with the law.
"If the accommodation is not contracted under some special conditions, the traveler can cancel it up to 45 days without major penalties. Then there are really minimal administrative costs, which will be up to 50 euros. However, if the cancellation is made a little later, the costs go reciprocally from five to 100 percent before the trip itself," he notes.
Seničić says that a special problem is non-refundable tickets, that is, the cheapest tickets that, as a rule, cannot be returned or canceled, which is the standard policy of many airlines, especially low-cost carriers.
"In the case of cheap trips, which are also the most attractive for travelers, travel agencies agree with low-cost or regular companies on extremely favorable terms of air transportation, and this implies that the ticket is non-refundable. This must be emphasized in the travel program itself so that the traveler knows before concluding the contract because in the event of cancellation of the arrangement, the amount paid for the ticket will not be returned," explains Seničić.
Source: Biznis.rs
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