Airlines like fuel surcharges because:
- Changing the fuel surcharge in a market can raise or lower every ticket price in that market, no need to re-file every single fare.
- They allow an airline to raise price even with many fixed-fare agreements.
- And, of course, because they can be charged to frequent flyers trying to redeem a captive points currency.
US frequent flyers — who don’t participate in mileage programs based outside the US — don’t have to deal with fuel surcharges very much.
- American adds them to awards on British Airways (and to a very modest extent on Iberia)
- Alaska adds them to awards on British Airways
- Delta adds them to awards on some partners – like China Southern and China Eastern – and to travel originating in Europe.
United doesn’t add them at all.
But for European programs, and those based in Asia Pacific, they can be huge — hundreds of dollars each way. The idea is that miles cover the fare only and the frequent flyer has to pay taxes and surcharges.
They generally make economy travel redemptions foolish, as you spend points and have to find availability, don’t earn miles, and still wind up paying much of the cost of a paid ticket.
Several programs like British Airways, Virgin Atlantic, and Air France have at least reduced fuel surcharges on either economy and/or short haul award redemptions.
Despite the decline in jet fuel prices, fuel surcharges — ostensibly ‘temporary’ fees meant to cover the ‘unprecedented’ cost of fuel — haven’t gone away. Indeed, some airlines are a bit embarassed to call them that now though. so they’ve just renamed them. (Here’s why airfares don’t fall in lock step.)
When you put out the narrative that part of your price is driven by the cost of fuel though, and that narrative gets eviscerated by the facts, it’s difficult to maintain without angering your customers. And when the public gets angry, politicians are there.
Goodness knows part of me cheered that class action suit against British Airways over the fees.
The Australian Competition and Consumer Commission (ACCC) is casting an eagle eye on petrol pricing and is about to apply the same scrutiny to airline fuel surcharges.
While oil prices have plunged almost 60% cent since June and are currently at levels not seen for over five years, the fuel surcharges Qantas, Emirates and Virgin apply to international tickets have not shifted.
…ACCC chairman Rod Sims says the ACCC is trying to work out whether the airlines have engaged in deceptive or misleading conduct. It’s not against the law to introduce a surcharge – but it’s against the law to mislead customers, Sims points out.
The piece suggests that Qantas introduced a fuel surcharge in 2004 when oil hit AU$44 a barrel. The amount was AU$15 per segment. Now a Sydney – London economy ticket adds AU$285.
Qantas, it seems, needs to make the switch to ‘carrier imposed surcharge’ nomenclature right away — to avoid the claim that they’re deceiving consumers.
Fortunately you can reduce fuel surcharges when booking awards from some regions.