One thing that readers keep asking is, with the price of fuel dropping, will airlines reduce or eliminate fuel surcharges?
And my answer is that few things would shock me more.
- What are fuel surcharges and how do they work?
- Why are airfares rising when fuel prices are going down?
Fuel surcharges aren’t about fuel.
- They are a convenient, easy way to raise or lower all fares in a market.
- Since they are a surcharge rather than part of the fare, they aren’t subject to percentage discounts that may attach to certain contracts.
- They conveniently are an excuse to charge more for award passengers (in some programs and for travel on some airlines), whose mileage currency can’t be used anywhere a member wants the way cash can.
Nonetheless, since airlines have used the price of fuel as the narrative for high costs, and explains surcharges rather than changes in fare as fuel (even though when coded as “YQ” they are ‘miscellaneous’ charges in the fare construction), it’s becoming tough for the storyline that attaches to these fees.
Where might airlines go with this? Air Canada is simply renaming the fees. They are being called ‘carrier surcharges’ as well.
It’s no longer about fuel, but the fees that were supposedly because of fuel remain. Clever.