Cruise Line Fuel Surcharges: Encore Performance?

April 26, 2010
Cruise Line Fuel Surcharges (4:35 p.m. EDT) -- With the price per barrel of oil some 75 percent higher than it was at the same time last year, Fred. Olsen Cruise Lines announced over the weekend that it will be tacking on a fuel supplement to its fares.

The Great Britain-based line will be adding £3 per person, per day, fuel supplements to all new bookings beginning 5 May. The maximum amount to be paid is £60 per person, per cruise, for the first two passengers in a cabin. Subsequent occupants in the same cabin will pay £1.50 per person, per day, and a maximum of £30 per person for the cruise. (The four-ship line is known for its pathfinding itineraries, so 20-plus-night cruises are not at all uncommon.)

In a statement, the line cited the current high price of Brent crude oil -- which is trading at around £55 ($85.50 U.S.) today -- as the reason for instituting the supplementary fee. Fred. Olsen also announced that, should the price of Brent crude oil fall back to £45 per barrel or below, averaged across the month prior to date of departure, the fuel supplement will be refunded to the passenger in the form of an onboard spending credit.

The question for the concerned cruiser becomes, will other cruise lines begin reinstating the surcharges that impacted cruise fares across the industry in 2008? It seems the answer for now is no, with one exception: As we reported in January, some Disney Cruise Line passengers have been paying fuel supplements, based on when they booked and the ship's sail date.

Otherwise, spokespeople from Carnival, Royal Caribbean and NCL all confirmed that their lines don't have any plans to re-adopt surcharge policies at this time. All three, however, reserve the right to do so if certain preconditions are met.

In its Q1 earnings call, Carnival Corp. executives said that the company expects fuel prices for 2010 to reduce earnings by some $119 million. Carnival reports that it's making every effort to cut back on fuel usage -- by way of itinerary changes and reduced speeds between ports. In the first quarter, fuel consumption per available lower berth day fell 3.1 percent.

--by Dan Askin, Associate Editor