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Fuel surcharges


Cruisers and other travelers seeing added fuel surcharges

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Jan 05, 2008

Danny Combs of Oxnard became irate when he learned he had to pay a $70 fuel surcharge or forfeit his prepaid Mexican Riviera cruise in February.

He complied, but he wasn't happy about the surprise fee that threatened his seven-day vacation.

Whether traveling by boat, car or plane, Americans can expect to pay more this year for transportation because of surging gas prices. Some airlines and cruise lines have added surcharges to offset increased fuel costs, including United Airlines, which tacked on a $10 fee in November.

The potential for more such fees grew Thursday as light, sweet crude for February delivery settled at $99.18 a barrel on the New York Mercantile Exchange after earlier rising to $100.09, a trading record.

Over the past three years, the price Carnival Corp. pays for fuel has increased 140 percent, with a 50 percent increase occurring in the past seven months, said Alan B. Buckelew, president and chief executive of Santa Clarita-based Princess Cruises, one of six North American cruise lines operated by Carnival Corp.

"Until now, the company has been absorbing this significant increase in fuel costs," Buckelew stated in a letter to Princess customers, explaining the need for the additional fees. "Unfortunately, we cannot continue to cover these substantial expenses, and now find it necessary to implement a supplement to partially offset a portion of soaring fuel costs."

Fully paid cruises affected

The letter, dated Nov. 7, indicated that the fuel surcharge, effective Feb. 1, would cost passengers $5 day, and would not exceed $70 per trip. The surcharge applies to both new bookings and those under deposit or fully paid, according to Princess Cruises.

Rita Vandergaw, director of marketing for Port of San Diego, said the fuel surcharge was reasonable.

"It may have an impact on travelers, but I certainly recognize a need for it," she said. "I think the cruise lines were probably the last purveyors of tourism transportation that have imposed a fuel charge."

Vandergaw, who used to work for the airline industry, said the fuel surcharge is the difference between profit and loss for airlines.

"It's a much smaller percentage of total operating costs for cruise lines than airlines, but it's still significant," Vandergaw said.

It wasn't the money but the method that Carnival used to apply the fee that bothered Combs. He didn't think it should have been tacked on retroactively and was upset that he was notified after it was too late to get a refund for the ticket, which cost nearly $1,000.

"It's like going into a restaurant a month after you've had the meal, and they've raised the price on the menu, and are now demanding to be paid the raised price" for what you ate, Combs said.

But Julie Benson, vice president of public relations with Princess, said the company contacted travel agents and passengers on Nov. 7 to give passengers adequate time to cancel their cruises without penalty.

"We had multiple ways to reach out to passengers and their travel agents to make sure that everyone had the information," Benson said. "For the vast majority of customers, I think it was accomplished."

'Egregious' implementation

Combs said his e-mail notification was dated Nov. 29, after the expiration of a 90-day advance window to cancel a trip without penalty.

He understands the need for the fuel surcharge, but he thinks it's important for the company to notify travelers while they are paying for the cruise.

Combs, who takes two cruises a year, said it is the first time he's been assessed a fuel surcharge. Now, it's an expense he'll expect.

"Everyone in the cruise industry now has a fuel surcharge," he said. "But the way Carnival implemented the policy was the most egregious of the cruise lines."

Royal Caribbean said its fuel surcharge of $5 a day would not be applied to cruises booked before Dec. 10. According to Royal Caribbean, guests who booked before Nov. 16 who did not agree to pay the supplement could cancel their reservations before Dec. 7 for a full refund. And no cancellation charges would apply.

Norwegian Cruise Line Corp. began levying a $7 per person per day fuel supplement fee on all new bookings made on or after Dec. 1.

Christina Osier, owner of All Right Travel in Simi Valley, said most of the fuel surcharges among cruise lines have been implemented within the past year. She has not heard of any of her clients having to pay the fees retroactively, though. She suspects the fuel surcharge won't make much of a difference.

"As a travel agent, you have to understand the benefits of going on the cruise, and that would far outweigh the cost of the fuel charge," Osier said.

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Cruisers and other travelers seeing added fuel surcharges
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