Are Fuel Surcharges Returning?

| 02.24.2011

With the price of oil rising rapidly fuel surcharges may not be far away.

The Itinerary for the Regent May 4 PBS Cruise

Fuel Surcharges Returning?
When the mainstream U.S. cruise lines first invoked fuel supplement charges in 2006 oil was trading for $105 Barrel. As of this writing oil is trading at $99 per barrel and, so far, none of the cruise lines have reinstated fuel surcharges. But you can be sure they are looking at the possibility very closely. The news of fuel supplement surcharges returning to cruises could come any day now.

Cunard Line, which has a large British following, reinstated fuel surcharges in late 2010; as did other British-based cruise lines such as P&O Cruises and Fred Olsen. They are charging about $6 per person per day. A few smaller and more specialized cruise lines, Voyages of Discovery and Swan Hellenic, have also imposed them.

The last time fuel surcharges were invoked we had very little notice - virtually overnight. Travel agents and cruise line direct sales representatives were advised that every cruiser had to pay, even retroactively for those whose cruises were on deposit or even already paid in full. But these retroactive charges did not go unnoticed, and it was decided by a sunsequent court cases that the cruise lines had not given their customers sufficient notice - and many surcharges were summarily refunded.

Today the cruise lines are obliged to give cruisers sufficient warning before invoking fuel surcharges - and so they already have. Virtually every cruise booked in the last two years has come with the caveat warning that the cruise buyer could be charged a fuel supplement at any time, even if your cruise is already paid in full. If this happens you will have no choice but to pay the additional money, or lose your cruise.

In fact, when the cruise lines rescinded the previous fuel charges they reserved the right to reinstate them at any time should oil rise above $70 per barrel. It is now as $99 per barrel and gaining daily. The only reason the cruise lines have not reinstated the charges already is because of the slow economy. They do not want to scare consumers away. However, fuel is a significant expense for cruise lines and they can only "eat" the cost for so long.

Right now, the cruise lines are mostly burning reserves they bought at lower prices, but at some point the higher fuel costs on the open market will reach their pocketbooks, and when that happens I expect them to reinstate fuel surcharges at about the same rate as before - $5 per person per day.

Problems Overseas Affect Cruises

We have already reported on the cancellation of a number of cruises to North African destinations like Tunis and Egypt. Some cruise lines have already cancelled all of their planned stops in Egypt for the rest of 2011.

But just yesterday I received a press release from Regent Seven Seas about a cruise scheduled to sail around the Arabian Peninsula, starting this coming May 4. The itinerary begins in Dubai and heads for Muscat and Salalah in Oman, then it proceeds along the coast of Yemen in what the line describes as "leisurely days along the Gulf of Aden" before it lands in Safaga, Egypt, followed by Aqaba Jordan, Sharm el Sheik Egypt, transiting the Suez Canal, visiting both Tel Aviv and Haifa in Israel and then finally landing in Rome.

Now, don't get me wrong; I am more than happy to see this particular itinerary and I truly hope it works out. But the fact is that most cruise lines are currently canceling cruises to Egypt, and we just had another pirate incident not far from the Gulf of Aden. That makes this cruise a leap of faith, if you will, that everything in the Middle East will turn out fine sooner than many people expect.

In all honesty, no one knows what is going to happen next. But it is common cruise line policy to err on the side of caution, so I was just a bit surprised to see this itinerary not only on the schedule, but being promoted as a special cruise featuring several NPR personalities like Charlie Cook, Ari Shapiro, Jacki Lyden and Bill O'Leary. Also along for the ride are British actor Michael York and renowned animal lover Jack Hanna.

Needless to say, a lot of planning has already gone into this cruise which they don't want to go awry. I contacted Regent to ask if they were concerned about the political strife in the area and they assured me they are "monitoring events in the area very closely." If you have a real spirit of adventure, this could be the perfect cruise for you.

I was just saying to friend of mine how fortunate I feel to have already seen Egypt and Petra, Jordan, before all of this uncertainty cropped up. And if I were to choose a single itinerary to see these places again this would be it. It has some of the most amazing sights in the world on the docket; Luxor Egypt, Petra in Jordan, the pyramids and Sphinx in Giza, Jerusalem, the Sea of Galilee and the Dead Sea areas of Israel. Each of these destinations gave me some of my most memorable travel experiences ever. The wild card is that we don't know if this cruise represents the continuation of access to these exciting ports, or possibly one of the last opportunities to see them. I truly wish it well.

Discuss the cruising to Egypt here: Returning to Egypt?.

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