LOGANAIR remains “exposed” to global fuel market volatility, the chief executive of the airline has said in the wake of scrutiny over surcharges implemented to help it maintain “a financially sustainable operation”.
Luke Farajallah said that the Scottish carrier, which began serving Jersey towards the end of last year following the collapse of Blue Islands, was “partly hedged against fuel escalations” but was still affected by “ongoing volatility”.
He made the comments after the Stornoway Gazette reported that a dossier had been sent to the head of a Scottish Transport Committee alleging that Loganair had generated over £2 million in “excess revenue” in the last six months from increases in its fuel surcharges.
In a post on social media, MP for Scottish constituency Na h-Eileanan an Iar, Torcuil Crichton, said: “Extremely disappointed to learn that Loganair had reportedly banked fuel before the war in the Middle East, yet has still increased fares.
“Island communities deserve transparency and answers. If fuel costs were protected, why were customers being asked to pay more?”
Mr Farajallah said that the Loganair team had not seen the dossier and, despite requesting it, had not been given a copy.
“We will not speculate on unverified claims attributed to unknown sources,” he continued.
“We remain committed to engaging openly and constructively with relevant stakeholders and will appear again before the Scottish Parliament’s Transport Committee later this month.
“Our focus remains on presenting the facts clearly and responsibly, while continuing to protect the long-term resilience of the airline and the vital connectivity we provide to the communities we serve, including Jersey.”
In April, Mr Farajallah said that Loganair was “not looking to profit” from a surcharge it had introduced to mitigate the impact of huge rises in fuel costs triggered by the conflict in the Middle East.
He warned at the time that “we can’t be exposed – otherwise all that will happen is air fares will just get dearer and dearer and we don’t want that to happen”.
The fuel surcharges, which vary depending on the flight being purchased, are listed as part of the booking summaries provided on the Loganair website.
As of yesterday, it stood at around £17 on flights from Jersey to Southampton and around £20 on flights to Paris.
Mr Farajallah said that the airline was operating “in a period of exceptional volatility in global fuel markets”.
He noted that, according to the IATA, jet fuel prices in Europe had more than doubled year-on-year.
“As a regional airline, fuel is a significant part of our operating costs, and maintaining a financially sustainable operation is essential to continuing to serve the communities and routes that rely on us year-round,” Mr Farajallah added.
“While partly hedged against fuel escalations, we remain exposed to ongoing volatility and believe it is important to be transparent with our customers.
“Rather than embedding these costs in headline fares, as some carriers are adopting, we have chosen to reflect them separately.”
