Simon Calder: As airlines hedge their bets, the passenger pays

The man who pays his way

Pity the poor tour operator in an unstable world. To provide us with the travel experiences we crave, they must cope with all manner of uncertainty, from snow to striking Spanish air-traffic controllers.

This week, both of Britain's giant holiday companies added a fuel supplement to holiday prices. Anyone buying a trip involving a flight on the in-house airlines of Thomson and Thomas Cook must now pay a surcharge.

On Thomas Cook, for example, the minimum levy is £15 per person for a short-haul flight to Spain or Portugal, rising to £40 for long-haul trips to the Caribbean and Florida. A family of four heading for the beaches, cultural riches and warm welcomes of Egypt or Tunisia will pay an extra £100.

At least they'll be in a good location to complain, because it is the political turmoil in North Africa that has helped cause a spike in the price of aviation fuel – up "more than 40 per cent in the last year", according to Thomas Cook. The company explains to customers that "all these costs are beyond our control", and that "the fuel levy is an unavoidable result of the rising price of oil". Both these statements, I contend, are tosh.

The fuel levy is, in fact, entirely avoidable. It is easy for any big tour operator to control its airline costs. They know, to within a few percentage points, how much Jet-A fuel their aircraft will use this summer. They are free to "hedge" – ie lock into – a specific price for that aviation fuel, and the dollars to pay for it. ppp Why, you may wonder, have the firms not taken out such an insurance policy to eliminate instability on global oil and currency markets? The answer: they have. Thomson's surcharges correlate, says the company, with its hedging positions – they start low (a fiver for short-haul flights) until next winter, when fuel levies rise to Thomas Cook levels.

Meanwhile Thomas Cook's parent company, which includes interests in Germany, France, Benelux, Scandinavia and Canada, has hedges in place "for fuel out to April 2012". Last month, the Thomas Cook Group as a whole bragged that it is five-sixths hedged (try saying those last three words after a poolside cocktail or two) for the summer.

How does Messrs Cook justify its price hikes? "The supplement covers the increase in price for unhedged fuel," says a spokeswoman. Consider a typical three-hour flight from Gatwick to Monastir in Tunisia. Passengers will pay an extra £12.50 each way.

If one-sixth of the fuel were unhedged, in line with Thomas Cook Group policy, that makes the total fuel bill per passenger a staggering £375 return. Those Airbuses must be thirsty. Yet the company is selling a week's five-star, half-board package holiday in Tunisia, departing Gatwick on 16 March for £148 – including the fuel levy (the trip is based at the Ibero Saphir Palace at Hammamet: book at if you're tempted. I was).

Thomas Cook says the tongue-twisting five-sixths hedging "isn't correct" for the company's UK operations. So what's the real figure? "We can't confirm the correct percentage to you."

Egypt's builders take it easy beside the Red Sea

Those tricky North African issues have also hit Thomson, Europe's biggest holiday company.

The firm said its Sharm El Sheikh Sensatori resort (formerly the Coral Sea Imperial) would open on Thursday. But "recent civil unrest" has caused a nine-week delay in opening. The upheavals clearly disrupted life in Egypt for a couple of weeks – but enough to cause a 66-day postponement?

Yes, says Thomson: "Unscheduled industrial action" has forced it to cancel all holidays at the resort until mid-May. The firm blames "a delay in finishing materials arriving from Cairo, as well as a reduced number of staff working on the project over the past couple of weeks". Industrial relations in Egypt must resemble 1970s Britain.

The refurbishment of the Old Cataract Hotel, a Sofitel property on the east bank of the Nile in Aswan, is running about year behind schedule. Only a cynic would speculate that Thomson has run into the same kind of difficulties in Sharm, but is seeking to lay the blame elsewhere.

Have you tried new the Independent Digital Edition apps?
ebookHow to enjoy the perfect short break in 20 great cities
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Guru Careers: Product Manager / Product Marketing Manager / Product Owner

    COMPETITIVE: Guru Careers: A Product Manager / Product Owner is required to jo...

    Guru Careers: Carpenter / Maintenance Operator

    £25k plus Benefits: Guru Careers: A Carpenter and Maintenance Operator is need...

    Recruitment Genius: Visitor Experience Coordinator

    £17600 per annum: Recruitment Genius: This museum cares for one of the largest...

    Recruitment Genius: Experienced PSV Coach & Minibus Drivers

    £12500 - £24500 per annum: Recruitment Genius: Drivers wanted for a family run...

    Day In a Page

    Mullah Omar, creator of the Taliban, is dead... for the fourth time

    Mullah Omar, creator of the Taliban, is dead... again

    I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
    Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

    Margaret Attwood on climate change

    The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
    New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

    New Dr Seuss manuscript discovered

    What Pet Should I Get? goes on sale this week
    Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

    The cartoon hedgehog leading the way into a whole new reality

    Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
    Ants have unique ability to switch between individual and collective action, says study

    Secrets of ants' teamwork revealed

    The insects have an almost unique ability to switch between individual and collective action
    Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

    Donovan marks his 50th year in folk

    The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
    Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

    Simulator recreates thrill of F1 circuit

    Rory Buckeridge gets behind the wheel and explains how it works
    Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

    Twitter accused of 'Facebookisation'

    Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
    Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

    Jane Birkin asks Hermès to rename bag

    The star was shocked by a Peta investigation into the exotic skins trade
    10 best waterproof mascaras

    Whatever the weather: 10 best waterproof mascaras

    We found lash-enhancing beauties that won’t budge no matter what you throw at them
    Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

    Diego Costa: I go to war. You come with me...

    Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
    Ashes 2015: England show the mettle to strike back hard in third Test

    England show the mettle to strike back hard in third Test

    The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
    Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

    Charley Hull: 'I know I'm a good golfer but I'm also just a person'

    British teen keeps her feet on ground ahead of Women's Open
    Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

    Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

    Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
    Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

    Our choice is years of Tory rule under Corbyn or a return to a Labour government

    Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'