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AER LINGUS EXPECTS to reap a €50 million-plus windfall this year from falling oil prices but has no apparent plan to give long-haul passengers any relief on its fuel levies.
The airline has been accused of gouging fliers on its lucrative transatlantic routes for failing to pass on its savings from plunging fuel costs – despite being quick to jump on any price rises in the past.
The airline’s fuel surcharges on many long-haul flights remain at the same levels set in mid-2008, when oil was trading at nearly 3 times the price it has been since December.
Aer Lingus, which is nearly 30% owned by Ryanair with another 25% in taxpayer hands, introduced a series of hikes to its fuel surcharges in that year after what it described as a “record upsurge of oil” over the earlier weeks.
The global oil price shot up to about $140 a barrel midway through 2008, but it is now trading at nearly one-third of that – about $50 a barrel.
The price of jet fuel very closely tracks the crude oil price and it has also plunged over the past 4 months on the back of a global glut in production.
Meanwhile, passengers on return flights from Dublin or Shannon airports to the US east coast now hand over €150 for the surcharge, while those flying further afield pay up to €216 on a return ticket.
The fees to cities like New York, Boston, Washington or Chicago remain at the same level they were in July 2008, when the oil price hit historic highs.
Fueling windfall profits
Earlier this week, Aer Lingus said it expected to save €52 million on its 2015 fuel bill because it had been able to buy 40% of what it needed for the year ahead at a heavy discount on the figures it had been using for its financial forecasts.
It bought the latest share for over 25% less than what it was paying before October, at which stage it had already locked in prices for 50% of the fuel it needed for this year.
Fuel costs make up about one-quarter of all the airline’s running expenses and the €52 million saving could add double-digit growth to its bottom line.
The airline on Friday knocked back a second buyout offer from British Airways parent IAG which valued the company at €1.28 billion. It recently said it expected its 2014 profits to be ahead of the €61 million it delivered in 2013.
No price cuts unless forced
Consumers’ Association of Ireland chief executive Dermott Jewell said there was an “urgent need” for companies like Aer Lingus that were reaping the benefits of low oil prices to pass savings on to their customers.
“The efficiency with which price increases are rolled out is breathtaking – so it beggars belief that there is a complete absence of even discussing a reduction in prices now that they have the opportunity to do it,” he said.
You definitely come away with the clear understanding that they are doing nothing unless they are forced or embarrassed into doing it.”
When asked if Aer Lingus had any plans to cut its fuel surcharges in line with the drop in oil prices, a spokeswoman said the company would only “continue to monitor the situation”.
“Aer Lingus hedges fuel costs in advance so market benefits take some time to realise,” she said.
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Helen Keller could have seen the energy crisis emerge, yet our imbeciles wait until it’s too late. Wind energy very sporadic. Nuclear is the way forward no point in panicking if sellafield goes up we’re dead anyways.
@fergusob: just par for the course here I’m afraid Fergus. Closing two power stations when the dogs on the street could tell you what was coming. It’s a complete farce and the ordinary person gets screwed yet again.
@fergusob: Gas generated, where will the Gas come from.
@ÓDuibhír Abú: sure they’ll probably just charge us a double bill ie gas + electricity + levy + supply + VAT!
@fergusob: I have to agree nuclear is the way forward. Who’s going to want it on their door step? Either way someone is getting pissed off The option should be put to the people vote on. build two one on East Coast and one on west coast. No planning application just find the most suitable locations and build. Give the people impacted free power for life for existing properties
@ÓDuibhír Abú: Where we currently get all our gas from. You do know we import no gas from Russia.
@Alan Wright: i think he means other countries will want to buy the UK / Nordic gas we use and prices will explode.
@fergusob: Nuclear has massive initial capital expenditures. Also the amount of time from planning to being operational can be around 20 years
@ÓDuibhír Abú: Natural gas meets over 30% of Ireland’s energy needs, heating and powering 700,000 homes and businesses and generating over 50% of the electricity Ireland uses. Natural gas in Ireland is currently supplied by a combination of domestic production and imports via pipeline from Scotland. In 2019, 53% of Ireland’s natural gas use was imported from the UK. Following the depletion of the Corrib gas field, Ireland is expected to be dependent on over 80% imports by the mid-2020s and over 90% by 2030.
@fergusob: I an’t wait 15 years or more for nuclear. Doubt if you can either.
@fergusob: I can’t wait 15 years or more for nuclear. Doubt if you can either.
@Jeff Cole: Sound, but we already have contacts for price and capacity.
@Lydia McLoughlin: the shine on your shoes says a lot about you.
Let’s leave our peat in the ground and build a generator that uses the dearest and most unpredictable fuel available
@John Fahy: Too dirty unless you are okay with contracting lung disease.
In all fairness can we not build hydro dams or something…like think out side of the box….and why should something like this go threw the years of planning permission….the planing office has fuuuuk every man and woman in the country
@Paul O Meara: nuclear!!!!!
@Thomas Meaney: honestly I don’t see the problem with safe nuclear power plants when Irish people hear nuclear they a thing it’s dangerous but there safe nuclear and next to no risk
@Paul O Meara: we have Ardnacrusha and look at the flooding it causes when the water levels aren’t controlled right.
@barry moore: I never knew this I must read into thanks
@Paul O Meara: with a hydro plant its a juggling match. Hold back to much water you flood up stream and release to much water and they flood down stream. We don’t have deep enough unpopulated valleys to create a dam.
https://www.thejournal.ie/flood-hit-limerick-5023320-Feb2020/
@Paul O Meara: We don’t have the topography for many hydro stations, Ireland is a very low lying country and the ESB exploited the few suitable locations 80 or 90 years ago. Besides, can you imagine the conversation today if someone suggested a new Blessington Lakes, telling 3 or 4 villages, ‘sorry but you have to move 20 kilometres away, we’re going to put your homes and businesses under 50 metres of water forever’; it just wouldn’t happen.
@Paul O Meara: still no way to get rid of nuclear waste otherwise I would be for it.
@Maria Mcphillips: pump it into the sea like England maybe
@Paul O Meara: Yes, but what we need to do, is to pass an amendment to the Planning laws that allows the installation of SMRs into existing thermal plant, without needing Planning. We need a couple of 300MW size like the RR into each of the old peat stations for starters. Then the wicked data centres. Then the waste heat of both to a mega area of 24/7/365 total pesticide free, hydroponic grow houses, then the Black Soldier Fly for feeding all the fish and fowl. Job done.
@barry moore: Ardnacrusha and the Lee dams need removing a.s.a.p. One new SMR would more than cover the lot of them. Our total hydro potential is about 100MW. One SMR a constant 300. A massive boost to our whole ecosystem and mega saving on the flooding.
Gas….. Are they serious?
@Stephen Foster: yes because nuclear is banned by law.
Just what we need right now.. A new electricity generating station that will produce the most expensive electricity on the planet but we are still expected to pay for it and be happy.
@Roger Bond: and don’t forget to smile.
@Roger Bond: and what is your solution beyond cribbing?
Green energy really is taking off!!
@Michael Wynne: t sure is, from what I can see for the foreseeable future to have really good green energy we need plenty of oil and gas to keep it going.
And the annual bill will only be 25000€
@Sean Nihill: Glad I don’t have 8 or 9 houses.
@Sean Nihill: and your solution is?
Isn’t gas a thing of the past?
@Shane McGrath: No. Gas and oil are are present and will be with us for years if not decades.
@Don Hogan: Not if Lettuce Ryan has his way. He wants to ban oil and gas boilers in homes from 2025. The man’s completely off his rocker.
@The Bolt: he can’t see that banning oil and gas we don’t have electricity.
the average human farts 14 times a day,and all fine, but when a cow does it we kill it,your all gone mad. and there goes the algo saying I’m wrong.free speech is but a fantasy these days.
@plug: Hey now! With your name are you anti gas :)
Let’s have your sell in
Yes and we can expect the usual objections I suppose. Time for emerthinking here- just get it built. Equally let the gas storage facility on the Shannon go ahead. One cold winter and the righteous professional objectors will be frozen out. When are we going to get the balance of the common good versus individual rights . It is very much skewed towards cranky assxxxxs at the moment.
Remember back when the great unwashed camped at Ross’s Point
Tar barrels burning on the corner of every street bring your kettle down and queue to boil it
Forward to the past
Gas fired? That’ll be cheap and plentiful.
Gas fired, bloody mupp£/so. Get more wind turbines to counter the energy crises. To think the CEO’S are paid big money to come up with this business plan, shocking
@Graham Crosby: and exactly how much did we get from wind generation in August? Smell the roses?
Lets build a gas power station to run all those new heat pumps and electric cars?
have your say