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Sunday, October 26, 2008

Royal Caribbean Pulls Back on Cruise Ship Fuel Surcharges

Royal Caribbean International is following rival Carnival in cutting back on fuel surcharges. But as with Carnival, the cut isn't across-the-board and depends partly on the future price of oil.

The most definitive part of Royal Caribbean's announcement, which came late today, is that it will eliminate fuel surcharges completely on all new bookings that come in for 2010 cruises.

The change, which applies to all three of its North American brands -- Royal Caribbean, Celebrity Cruises and Azamara Cruises -- is effective Nov. 10.

The company also says it will refund the fuel surcharges that it already has collected from customers for sailings in 2009 and 2010 if the price of oil remains below $65.

Royal Caribbean says it will measure oil prices each quarter over the coming two years to determine whether passengers will get refunds.

"Refunds, in the form of an onboard credit, will be provided if the closing price of West Texas Intermediate fuel is $65 or less, at the closing time of the New York Mercantile Exchange, two weeks prior to the beginning of the upcoming calendar quarter," the line said in a statement. "When those conditions are met, an onboard credit will be provided to all guests on sailings that begin during the upcoming calendar quarter."

The formula is similar to one anounced 11 days ago by Carnival, although Carnival's cut-off for refunds is oil at $70.

Royal Caribbean adds that it will "continue to closely monitor the movement of global fuel prices and recognize that an upturn in those prices could necessitate the reinstatement of a fuel supplement."

Royal Caribbean and other cruise companies began adding fuel surcharges a year ago when oil prices first spiked to $100 a barrel. Like others, Royal Caribbean subsequently raised its fuel surcharge several time and has been charging $10 per person, per day since the summer.

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