Japan airlines increase fuel surcharges despite falling jet fuel costs
All Nippon Airways and Japan Airlines increased fuel surcharges on Wednesday; Fares exceeded $400 on some long-haul flights.
The increases applied to tickets purchased in July and August are being made even as jet fuel prices are falling in Asia. That’s because Japan’s two largest airlines calculate fares based on averages that lag current prices by several months.
Jet fuel fell from a record high of $242 per barrel in late March to $113 per barrel on Wednesday, according to data from LSEG. But the surcharges starting this week are based on prices between April and May, which averaged $178.21, according to JAL. Press release.
The airline said the surcharges could have risen even higher if not for budget assistance from Japan’s government to help with rising energy prices resulting from the Iran war.
Fuel taxes on some routes have tripled since the start of the Iran war; Fares for flights from Hawaii, India and Indonesia to Japan rose from $94 in April to $310 in July. ANA’s website. JAL’s surcharges are similar.
The new taxes reach 65,000 yen for flights from North America (excluding Hawaii), Europe, the Middle East and Oceania. That’s around $400 after the yen hit a 40-year low against the U.S. dollar on Tuesday.
Fuel surcharges on ANA and Japan Airlines are revised every two months. Therefore, these prices are expected to decrease for flights purchased in September and October, reflecting average jet fuel rates in June and July.
This could also help travelers pay for other expenses that increase on July 1. Exit taxes rose from 1,000 yen to 3,000 yen ($18), while visa fees increased for the first time since 1978, rising from 3,000 yen to 15,000 yen ($92) per person.
— CNBC’s Matthew Tan and Lim Hui Jie contributed to this report.
