Published On: Fri, Jan 10th, 2014

InselAir price increase necessary as costs have gone up dramatically

Insel_Air_MD80WILLEMSTAD - Due to increases in fees and charges of third parties, such as landing fees and air traffic control fees since December 2012, InselAir is now forced to increase its base fares with 10% per January 15 2014. InselAir, in the past years, has been confronted with these increases, but has never incorporated these in the price of their tickets. In order to remain a healthy organization InselAir can no longer refrain from this as some of these fees have increased drastically since 2012.

Increase in fees
During the past years InselAir has been confronted with, among others, further increases in air traffic control costs in some countries - and specifically in Curacao and Bonaire - in reservations systems costs, which are indispensable for ticket processing nationally and internationally, and in handling costs at some airports. Up to now, InselAir has refrained from incorporating the effects of these price increases into their ticket prices, but can no longer prolong the inevitable without jeopardizing the sustainability of the airline and safeguarding the services rendered to their passengers. Therefore, starting January 15, 2014, InselAir will increase the base fares of its tickets, on most routes, with 10%.

Breakdown of ticket prices explained
The base fare may fluctuate over time as it is influenced by the costs an airline has to run its business, such as landing fees, reservation systems costs, air traffic control costs and general overhead costs.

Additionally, the government also charges taxes on all tickets. Jurgen Lippinkhof, Chief Commercial Officer of InselAir, illustrates this with an example based on one of the ticket prices: ‘A round trip ticket Paramaribo - Curacao costs 668 NAF of which 160 NAF (29%) is government tax and 508 NAF base fare (including fuel charge). 16% of this base fare goes directly to third parties, such as passenger handling companies, air traffic control and reservations systems. Take also into account that 56% of the base fare is used for fuel which leaves 28% - 147 NAF in this case - for InselAir. With this amount we cover all other expenses such as insurance, financing, maintenance, security, safety, wage, catering and much more. In the end, around 2-3% (10-15 NAF) is left as profit for InselAir, which is immediately invested back into the company,’ according to Lippinkhof.

InselAir trusts that passengers understand the necessity of this price increase and guarantees that it always will strive to keep the ticket fares as economic as possible, but will always need to take the above into consideration.

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