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Lan reduces air fuel surcharge and slashes fares

Friday, December 26th 2008 - 20:00 UTC
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Chile's leading airline Lan and Sky Airlines have virtually eliminated the fuel surcharge in all domestic flights and slashed fares, in line with the falling prices of fuel, reports the Financial and Business section of Santiago's main daily El Mercurio.

For example last August at the peak of international oil prices, all Lan South American flights had a fuel surcharge of 60 US dollars on each leg. For North America, US, Canada and Mexico the surcharge was 210 USD and to Europe 235 USD. Those additional costs to passengers have been cut to 23, 60 and 125 USD, respectively. "Fares reflect the fall experienced by the reference WTI oil price, with a reduction in the surcharge for fuel", said a spokesperson for the airline. International fares have also been slashed from their peaks just a few months ago: Lan Chile's Santiago-Rio do Janeiro a traditional summer flight is down from 729 USD to 299 USD; Santiago-Miami from 1.723 USD to 923 USD. According to El Mercurio Lan has established a system for fare values linked to the price of oil, according to a range of costs. The equation includes the index of oil prices, taking into account the average last two weeks calendar daily closing price of the WTI oil reference at the NYMEX (New York Mercantile Exchange). This index is incorporated to the fares cost. Apparently other Latinamerican airlines are following such as Panamanian TACA. But Christian Meek head of Marketing of Viajes Falabella (one of Chile's largest stores) points out that there are other even cheaper options. "Direct, exclusive charter flights (organized by Falabella Viajes) mainly to Brazil and Caribbean" with far more accessible air fares. Brazil and the Caribbean are some of the summer hot spots for Chilean tourists.

Categories: Economy, Mercosur.

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