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Sky-high fuel surcharges stick despite sliding energy prices

August 13, 2008

Energy prices may be falling, but airline fuel surcharges are holding steady — if not rising.

The fees on tickets to Europe this autumn were already pretty high, ranging from $342 to $474 per ticket, according to sample fares from Bestfares.com. That figure doesn’t include landing fees and taxes of about $258 (but that’s another story).

But jet fuel prices are headed down, dropping from $3.64 per gallon on July 29 to $3.39 per gallon on Aug. 4, according to the Energy Information Administration. This has triggered widespread speculation that fuel surcharges would fall, too.

Wrong.

The winter fares to Europe — also courtesy of Bestfares.com — show the exact same fuel surcharges. Meanwhile, the base fares have dropped by about $200, as they do during the off-season. So proportionately to the fares charged by the airlines, the fuel surcharges have actually risen.

Many airfare experts believe airlines will eventually lower their fuel surcharges, as energy prices continue to decline. But the fares currently being offered seem to contradict the conventional wisdom. They suggest airlines have unbundled energy costs from their base fares, and probably have no intention of folding their fuel costs back into the price of a ticket.

We already know that airlines plan to do this with non-fuel-related surcharges. If they can get away with it on fuel fees, too, it may not be long before base fares are pure profit.

Time to buy airline stock? Perhaps.

(Thanks to my friends at the San Antonio Express-News for the tip.)

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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5 comments

  • http://travel-babel.blogspot.com Claire Walter

    IMO, not only WON’T fuel surcharges go away, but neither will the assorted other charges levied in the name of sky-high fuel prices, nor will services that had been eliminated be restored. Once airlines discover that they can wrest a couple of bucks from passengers for a bottle of water or a can of Diet Coke, or more than a couple of bucks to check bags or redeem, frequent flyer miles, I don’t envision a pullback on those fees. However, having written that, I would LOVE nothing better to be wrong.

    Claire @ http://travel-babel.blogspot.com

  • Bob

    The fuel surcharges started when jet fuel hit a sustained level of over $2 per gallon. You won’t see a drop in them until jet fuel goes back to that price, not just drop from $3.64 to $3.29 which is nothing. If it had stayed at $3.64 you would have seen higher ones as the surcharge is always behind the rise.

  • ed perkins

    Talk about fuel surcharges is a bit off track. In the US, DOT requires that airlines include any fuel surcharges in the base published fare. For various reasons, some airlines continue to separate base fare from a fuel charge in their internal calculations, but they can’t present fares with a separate fuel surcharge to the public. A few third-party sites still advertise “discount” fares that exclude fuel charges, but DOT has already fined at least one big wholesaler for doing that. As far as American consumers are concerned, all that matters is the published base fare. The only allowable extras ar PFCs, government segment fees, international customs/immigration fees, and such.

  • Christopher Elliott

    That is absolutely true, Ed. I should have noted that in post.

  • http://crash456.blog.co.uk/2009/10/13/high-fuel-prices-is-there-any-alternative-7158345/ Jonathan Paul

    Thanks a lot blogger for such a nice post about fuel price .
    :-)
    Keep blogging

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