Air Carrier Responses to the Fuel Price Crisis: Some Issues

Abstract

The Summer of 2008 heightened the burgeoning fuel price crisis which had been felt by the global community several months earlier, forcing numerous air carriers to react spontaneously and precipitously. Some carriers proceeded to apply surcharges on the first piece of baggage carried by a passenger – a practice hitherto unknown in the industry – and increased air fares as they thought fit, while others retrenched staff and cut down on their services. The air transport product has, throughout its availability over the past six decades, customarily carried a person and his baggage at a maximum free allowance. The measures taken by the carriers to transfer the burden of rising fuel prices to the passenger to the detriment of this accepted practice, brings to bear the issue as to whether the carriers could have considered alternate steps before taking these impulsive measures, which were clearly calculated to adversely affect the consumer of the product they offered. It also examines the critical role played by the air transport industry in its contribution to the global economy and the issue of passenger rights. The article concludes by examining as to what prudent measures could be taken by the carriers to more efficiently operate their air services in times of such crises.