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Posted on Wednesday 02 May 2012 in Flights
Airlines are doing everything they can across the globe to retain their customers and combat complaints of excessive fees. This is proving to be a challenge, especially because of rising fuel costs that are creating a snowball effect for more charges to be added in other areas, such as additional baggage expenses and online booking fees.
However, these companies are trying some solutions outside the box that may help alleviate issues with flight prices that can satisfy customers while still creating revenue. For instance, the U.S.-based Delta Airlines has announced a deal to purchase an oil refinery in the state of Pennsylvania to help reduce their fuel costs internally. This processing plant could provide roughly 80 per cent of all needed jet fuel for Delta planes if the bid is won.
The airline put in an AUD $145 million bid to ConocoPhillips for the refinery and, if successful, would be the first carrier to own its own energy source. Experts from Delta say that the deal could save them more than AUD $290 million every year on fuel costs, generating more revenue and allowing customers to enjoy better services, including the elimination of some added fees.
"What we’re tackling here today is the jet crack spread, which you cannot hedge in the marketplace effectively,” said Richard Anderson, chief executive officer at Delta. "It’s the fastest single growing cost in our book of expense at Delta."
Delta is one of the leading airlines in the U.S. that offers passengers more than 4,000 flights a day. As part of the SkyTeam alliance, the company covered various major cities throughout the country, including flights to New York and flights to Los Angeles. With the purchase of the oil refinery business, many of these routes could experience additional offerings, and Delta may also expand their services to reach new destinations in the near future.
Aussie travellers may want to keep track of companies like Delta that are paving the way for finding ways to reduce costs and present more wallet-friendly rates. Although flights will be far from free, more travellers may be able to plan their holidays when fuel prices are manageable and tickets can be offered without exorbitant energy expenses.
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