Fuel surcharges on int'l routes to drop

Although the Japanese yen has declined in value vis-à-vis the U.S. dollar, the good news is that the falling cost of petroleum on world markets is enabling international carriers to reduce the special fuel surcharges levied on their routes, J-Cast News (Jan 16) reports. For Japan, this, plus moves to expand the number of products eligible for duty free shopping exemption is likely to further stimulate the record-breaking numbers of foreign visitors to Japan. And it also raises the possibility of more Japanese traveling abroad during the coming Golden Week vacation period (April 29~May 5).

The new surcharge rates applied by All Nippon Airways, which were revised last Dec 17 and will take effect from Feb 1, have been lowered, respectively to 14,000 yen and 7,000 yen, for respective one-way destinations in North America and Europe, the Middle East and Oceania. Considering that the previous surcharge (set for six months from April 1, 2014) was 25,000 yen, this represents a considerable drop.

Japan Airlines also announced a similar reduction in fuel surcharges on the 9th of this month.

Fuel surcharges are determined by the average prices for aviation fuel on the Singapore market over a previous fixed period. Over the two months from Oct-Nov 2014, this was $99.07. According to a report by Reuters dated Dec 5, 2014, if the average price per barrel was to fall to less than $60, the surcharge would become zero.

Petroleum prices have continued their fall from last December, and around the start of 2015 had fallen below $50 on the New York futures market. Should this trend continue, the surcharge may very well drop to zero, the lowest figures since a short-lived period from July to September 2009.

"The drop of one-way surcharge by 4,000 between Singapore and Japan isn't enough to make me want to go back to Japan," a Japanese woman living in Singapore told J-Cast News, who added, "If it drops to zero, on the other hand, maybe I might decide to take the kids back home for a visit."

Another Japanese woman with three children, residing in Washington state, says she'd be happy for a break on costs. "On a one-way trip from North America, the reduced rate is nothing to sneeze at," she says.

The surcharge for Golden Week is expected to be released in February.

With both the value of the yen and fuel surcharges declining, this is likely to see more Chinese flying to Japan for shopping tours. According to the government tourist bureau statistics released on Dec 17, 2.22 million Chinese visited Japan over the first months of 2014, a year-on-year increase of 80%. And more visitors are expected this year.

Overseas travel by Japanese nationals, however, has not shown a commensurate rise. The number of foreign-bound departures from Narita during the year-end and new years season, which ran from Dec 19 to Jan 4, 69,700 travelers, reflected a 17.8% drop from the same period a year before -- and this despite the combination of holidays and weekends that gave many workers nine straight vacation days. The decline is believed to be a result of the weakened value of the yen.

While the alignment of holiday dates and weekends for this year's Golden Week are shorter than in other years, if travelers take off from work on May 7 and 8, then it will be possible to extend their trip to nine straight days. The surcharge applied on a round-trip ticket to North America or Europe will remain at 28,000 yen until March 31. If the surcharge falls to zero after that, the Japanese exodus to foreign destinations may pick up with a vengeance.

© Japan Today