With the world price of oil dropping steadily over the past week and a half, a number of airlines have announced reductions in the fuel surcharge imposed on their product.

Late last week, American Airlines Cargo lead off the reduction by reducing their surcharge, the airline base their surcharge level on the weekly average spot price of kerosene-type jet fuel as reported by the U.S. Department of Energy.  An index which is calculated by averaging the five current spot prices in the New York Harbour, U.S. Gulf Coast, Los Angeles, Rotterdam and Singapore markets.

Other airlines that have followed suit in reducing their fuel surcharges include Northwest Airlines Cargo, and British Airways Cargo. Both airlines have reduced their fuel surcharge as a result of internal reviewing of indexes and applying independent methodology to the ongoing pricing of jet fuel.

Commenting on the reductions, the Senior Manager of Revenue Management at British Airways, Adam Carson noted that "While fuel prices remain high, with costs falling we have seen some relief. This has triggered two fuel surcharge decreases in two consecutive weeks, in line with our index."

Previous to the the recent pullback of the world oil prices, the continued rise in the price of oil and subsequently jet fuel had placed an increasingly heavy financial burden on the operations of many of the worlds cargo airlines.

Source: American Airlines Cargo, British Airways Cargo and NorthWest Airlines

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