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As price of jet fuel plummets, airline surcharges defy gravity

September 12, 2008

They make us pay for our first checked bag. They invent new fees. They slap outrageous fuel “surcharges” on to the price of our ticket.

Why? Airlines say it’s because fuel costs are out of control.

What nonsense. The price of jet fuel is actually coming down, according to the Energy Information Administration (see chart, above).

I told you that this was never about fuel costs, and it looks as if I’m right. It’s just a money grab.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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19 comments

  • http://www.theluggageblog.com Jenni

    I completely agree that the extra fees have nothing to do with fuel… if they charged us a fair fuel surcharge that reflected their costs, that would be one thing… but they’re tacking on fees for checking your bag, crappy little snacks, pillows, the right to wear a silly green hat—all in the name of a fuel crisis. But the convenient thing about these fees is that when fuel prices drop, they’ll say they have no obligation to give you a free soda (and the law will agree).

  • Kevin

    This has more to do with how poorly managed these companies are. It’s really fairly simple:
    1) Set a Base Price on a ticket that is compensatory to your actual costs plus adjustments for empty seats in the opposite direction.
    2) Add fees for Luxary items like premium meals, alcohol, etc…
    3) Levy a Fuel Surcharge based on the current cost of fuel as well as a projected fuel cost based on current trends and historical trends.
    4) Do not charge superfluous surcharges that serve no other purpose then to fatten the Airlines pockets and make the customers upset.
    5) Do not lie to the customers by claiming charges for stupid stuff covers rising fuel costs when that should have it’s own catagory. These extra charges they are charging are because the airlines are horribly managed companies.
    There are always going to be Bargin Hunters out there that go for cheap, but there are also a lot of people willing to spend a little bit more for quality service. Hence the reason both Motel 6 and Marriot are still both in business.

  • http://www.bravenewtraveler.com Ian

    Agreed, there’s likely some sort of cash grab going on, but with many airlines folding completely, that can’t been good business sense.

  • jj

    What I’ve never understood is why they have the cost broken down into these various fees. I _never_ look at the “ticket” cost, only the full cost of getting me on the plane. Who do they think they are fooling?

    (I can guess that this is tied up in GSA and other large contract pricing, but geez. I’m sure those large travel offices look at the bottom line too.)

  • http://parodyandson.blogspot.com Bruce Hopman

    PET PEEVE ABOUT PET FEES:
    And what about increased pet fees!?! All airlines increased them to AT LEAST $100 each way. Some are even at $150!! And this is to just put your pet under the seat in front of you!!! On top of that, you GIVE UP your right to a carry-on bag. So basically, your pet is your carry on, AND you have to pay upt to $150 for that priveledge. What could possibly justify this outrageous expense? If you’re pet is small enough to fit under a seat, it must be pretty light — so it’s not like you’re adding additional weight like a heavy bag. The pet is only taking up the space you were probably already taking up for free. It’s a total scam if you ask me. And on SOME flights, you could actually be paying MORE for your pet to sit UNDER a seat than you’re paying to sit IN one!! I tried to save myself a few bucks by asking if I could pay for the seat and put my pet carrier in the seat, and they won;t let you do that. WHAT A SCAM!!!

  • http://www.travelsavvymom.com jamie

    It’s such a tremendous opportunity for a handful of airlines (Southwest I guess, any others?) to stand out by not being total scurvy weasels. Customer loyalty is so hard to get, and so easy to lose.

    I’m STILL mad at United for refusing to give my family of 4 (including a 3 and 5-year-old) seat assignments for a 5-hour flight to Hawaii until we got to the gate that day. I worried myself sick that they wouldn’t put us together, called repeatedly, but still they wouldn’t commit. How does that make sense?

    Whenever I have a choice, I choose the other airline every time.

    So stupid and short-sighted.

  • Chicky

    Well of course it never was about the fuel prices. Never, ever, ever. That was just an excuse. And now that fuel prices have dropped, all those fuel surcharges will just become profit, or whatever. I’m no economics major. It’s like any other fee or tax: once it’s in place, it’s there to stay. It’s too lucrative a little piggybank to discontinue.

    Bah. Humbug.

  • aliasbuck

    Have to love the brass at United raising their second bag fee today and claiming that it’s because of increased fuel prices.

    Do they really think ANYONE believes this (at least anyone who can do basic math)?

  • Christopher Elliott

    I saw that announcement and I had to laugh out loud. Here’s some fun reading for all you skeptics reading my blog: http://www.united.com/press/detail/0,6862,59802,00.html

  • George

    To Kevin:

    When you decide to start your own airline, let me know! I’m onboard.

  • Skip

    So what can be done about this blatant lie? Write a congressman, boycott, complain to the airline, sit back and lump it? What can be done?

  • Bill

    I wish the airlines would charge what they need to charge and get on with it. I want a safe flight. I want to be reasonably comforable. I want the airline’s employees to be paid well enough that they are able to support themselves and their families.
    I think their executives should be paid a lot less.
    It is a little bit ridiculous when i am told a ticket is $140 each way and it ends up being $600.

    Since they are all so stubborn, we do need a government regulation that says the airline must include all of their own fees in their quotes, and the only add ons can be the ones mandated by the airports and government. All fuel costs need to be included in the ticket price.

    I’m about to pay my first “baggage fee” this week. Would have been easier for them to just let me include it in the price of the ticket.

  • Ed

    Hey Chris…
    How about creating a petition letter that we all can add comments to that will be sent to the heads and boards of all the major airlines? This letter will outline that fuel prices are going down, yet the surcharges are not and that as passengers we are not happy about this (you are the word-smith, I’m sure you can come up with a better way to say this) Publish the letter on your blog and let everyone here add their 2 cents worth, then at the end of a week or so, blast it out to all the airlines executives and board members…
    I think that will shake things up some! Look what happened when United tried to remove meal service from international flights! Sometimes the customer DOES have a voice (although it remains to be seen if we have anything to say about the Jet Blue $7 charge for blankets and pillows!)
    Ed
    web/gadget guru

  • Christopher Elliott

    Interesting idea. If I wrote such a letter, what should we ask for?

  • Deborah

    Chris, I think we should ask for:
    1) Fuel surcharges that actually bear a resemblance to the actual rise/fall in fuel prices
    2)No other auxilliary charges, put it all in fuel charges or RAISE THE TICKET PRICE
    3) Basic ammenities, soda, water. maybe a nut or two. Even in coach.

    It’s the least they can do.

  • Kimberly

    Personally I felt the rising fuel prices were a ridiculous excuse. Several of the airlines that declared they NEEDED the checked bag fee to off set rising fuel costs had already been in financial trouble BEFORE the fuel jumped up.

    I think they had already dug themselves into a hole due to poor management and they found an excuse that everybody could relate to and understand a bit because it touched their lives. Gas is expensive.

    My vote is quit adding all these fees and tell the truth…how much is my ticket?

  • Lianne

    1. Drop the 1st Bag fee for the 1st check bag.

    2. Gimme a least a damn water for free.

    Since 1st Check Bag fees and beverage fees were *supposed* to be a the result of high fuel prices they should logically be the first to be dropped.

  • http://airlinealacarte.com Star

    <>
    Ed

    Good point, Ed. I think it’s just a way for the carriers to give more ‘perks’ to their most frequent flyers, since they are exempt from all these fees.

    ~Star
    http://airlinealacarte.com

  • karen

    I guess we need to think about regulating the airlines again. I do not think the airlines are weasels. There were a great deal of them in bankruptcy. You only showed a graph of the fuel costs for one year. Why don’t you do a graph of the cost of tickets since the 70′s and 80′s and the increase in costs of labor and fuel. People are working for the airlines that make $11.00 an hour. You can not even get a gardner who will work for under 15 an hour and they do not pay taxes.
    When they set up the charging for bags idea, I started thinking about how they were creating a new job, and more workers would have to do more work and collect money to get the charge. It is silly, but everyone seems to think it should be $300 for a roundtrip to New York from California. That is so unbelieveable. Come on people, you will go out to a nice dinner, have a drink or two in the bar first, get an appetizer, order wine and two entrees and skip dessert. Hey, you also ordered a salad, and your hubby ordered mashed potates. ( everything in a restaurant is separated now) You still have to tip ( 20% now?? do you believe it??) You have spent close to 200.00 or more. So why do you think you should be entertained , fed, and fly in 8 hours across the country and pay only 100 or 200 more?? Come on. We all spend more on everything. Do the graph of airfares and fuel costs.
    I think we are going to start seeing the airlines cut out more cities. They are not going to pay labor costs for pilots, flight attendants, maintenance, baggage gate and administrative employees, insurance for employees, fuel costs, and the cost to keep up terminals in all those cities ( which they are taxed on) So, all of us who fly to little places are going to have to drive from either Seattle, San Francisco, LA, San Diego, to Denver, or Dallas, maybe Memphis, Atlanta, Miami , Dulles, LaGuardia, and Chicago. What if those were the only places that the airlines would fly to? We would have to rent cars, buy gas and spend an entire day getting to where we need to go.
    We need to look at regulating the airlines again. It can not support itself, and then we would have a say in all the CEO’s huge exit salaries. That is where the money goes. Management with bonuses.

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