The surging oil price is forcing a rethink in the airline industry with several operators moving away from all-in cargo pricing and reintroducing a fuel levy.
But while the levy will soften the blow, it cannot compensate fully for the fluctuation, says Airlink Cargo executive manager Alwyn Rautenbach.
Providing some context to the current situation, Rautenbach explained that when the oil price was very high – $120- 130 a barrel – airlines implemented a fuel levy to counter the fluctuation and avoid having to constantly adapt the rates. When the oil price came down and remained low for some time, they abandoned the levy and increased the freight rate.
“But now we are back in a situation where we have a rapidly rising oil price and those that abandoned the levy have brought it back – among them Emirates.” Every airline has a different surcharge and its own methodology of calculating it. It’s not a coordinated effort.
