Virgin cuts fuel charge

LOW-COST carrier Virgin Blue this week said it would reduce fuel surcharges by 20 per cent on its domestic flights and Pacific Blue trans-Tasman and Pacific Island flights, just days after Skywest Airlines announced its airfares would rise by 4 per cent.

Virgin's fuel surcharge, reduced to $19 for a one-way domestic flight and $35 for one-way Pacific Blue and Polynesian Blue international flights, comes after a decline in global oil prices in recent months.

The airline last increased its fuel levy in February in response to successive record hikes in the cost of jet fuel.

"We are reluctant to ever increase the cost of air travel by even a small amount, however as jet fuel prices continued to rise and rise to extreme levels, like all airlines we were forced to introduce a levy to cover those costs," Virgin chief executive Brett Godfrey said.

"But we have always promised that if the cost of fuel reversed, we would gladly reverse the surcharge accordingly."

The Virgin move came after Skywest chief executive Paul Daff said on November 6 that the airline would increase full economy airfares - its first price hike in three years - but would offer a new "web fare" discounts to online buyers.

Skywest said web fare would save customers up to $20 on ticket purchases as well as on travel agent and call centre booking costs.

In September, Skywest reduced its fuel surcharge to $37 for turbo-prop routes and $39 for jet routes.

Mr Daff said at the time that the airline would continue to tie all future movements on the fuel surcharge to changes in the cost of aviation fuel.