Fuel Supplement is History... For Now

Yielding to pressure from consumers, travel agencies and their competitors, Royal Caribbean International announced late today that fuel supplements will be suspended on all their US brands (Royal Caribbean, Celebrity and Azamara) for all sailings January 1, 2009 and beyond. New bookings made starting Monday, December 8 will not be assessed the supplement, and for those already booked for 2009 and 2010, those who have already paid the supplement will be refunded in the form of an onboard credit, and those yet to pay final will have the supplement removed from their invoices.

Similar to the announcements made yesterday by the other major companies, there is a bit of a caveat in the release:

The company reserves the right to reinstate fuel supplement charges if the price of West Texas
Intermediate fuel exceeded $65 per barrel, on the quarterly milestone dates mentioned in the
company’s October 24, 2008, press release.

That is very telling. In talking with cruise lines today about both new and existing bookings, several reps were clearly coached with a new script which indicates they do reserve the right to reinstate the supplement, even on bookings where it has been removed or was never implemented in the first place. That means that a supplement could have been on a booking, removed, and if fuel goes high enough ($65-70/barrel depending on cruise line), added back on again.

Personally, my guess is that the Florida Attorney General won't stand for it being replaced on a booking which was created without it or from which it was removed, and will force the cruise lines back into negotiations should it become relevant. But for a true ruling on that, only time and West Texas Intermediate (or Sweet Crude) prices will tell.