Average family faces £500 fuel surcharge for long-haul holidays

Families flying abroad face paying a fuel surcharge of more than £500 as airlines hike their prices again.

The latest increases are the result of rocketing oil prices and a chronic shortage of aviation fuel.

They come on top of existing charges which already exceed £100 per passenger.

Air France and Dutch airline KLM yesterday increased their surcharges by up to £12 on a return booking, blaming the spiralling cost of oil.

Passengers on long-haul Air France and KLM flights now pay a total surcharge of up to £126 per return trip, or £32 on short-haul.

This means a family of four will pay £504 in surcharges for a long trip.

Britain's three largest carriers, BA, Virgin Atlantic and BMI said they had no current plans to raise surcharges, but increasing pressure on fuel prices and supplies may prove unstoppable.

British Airways said last night: "We continue to monitor the price of oil and keep the surcharge under constant review."

BA passengers are already paying a £116 surcharge on return flights of more than nine hours - £464 for a family of four - and £96 on flights of under nine hours.

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The airline is likely to be in the forefront of any price increases because it has only 'hedged' - or agreed a fixed price in advance - for half of its 2008 fuel needs.

Virgin Atlantic has hedged about 65 per cent of this year's fuel needs.

Oil industry experts are predicting a surge in oil prices from Easter as world demand for supplies soars ahead of the holiday season.

They believe oil will go up to between $110 and $115 a barrel, having recently hit $100 a barrel. Motorists are now paying £1.04 a litre for petrol and £1.10 for diesel and face another 3p a litre.

Ray Holloway of the Petrol Retailers' Association said: "Crude price will start rising significantly from Easter.

"We'll be back at $100 a barrel by the end of February. And by summer we could be at $110 to $115.

"That's bad news for motorists and for holidaymakers. It will mean 3p a litre or so on pump prices and higher aviation fuel prices."

Airlines are also suffering a shortage of aviation fuel, which in the 12 months to December has nearly doubled in price from $596 to $908 a tonne.

The situation is so serious that Esso and BP in the UK have stopped producing paraffin to concentrate on boosting aviation fuel.

Even so, supplies at Heathrow and other British airports remain 3 per cent short of demand. Experts predict even worse to come with demand for energy from booming economies including India and China.

Watchdogs at the Air Transport Users Council (AUC) have described fuel surcharge hikes as a "classic example" of misleading price practices.

In August last year Sir Richard Branson's Virgin Atlantic escaped hefty fines and gained immunity from prosecution after blowing the whistle on a price-fixing deal involving fuel surcharges with rivals British Airways, which was fined £270million by UK and U.S. watchdogs.

Budget airline Ryanair says fuel surcharges are a "rip-off" and insists: "We will never apply a fuel surcharge, not now, not ever."

• Speculation that British Airways might be the subject of a takeover bid by a Middle Eastern airline sent BA shares soaring yesterday.

But the Emirates airline insisted it was not planning to buy a stake in BA.

"Emirates is concentrating on organic growth," said a spokesman in London.