Airlines' fuel surcharges fade, but airfares don't
Travelers are paying the same as before the change
By Tom Stundza -- Purchasing, 11/12/2008 1:20:00 PM
U.S. airlines are dropping fuel surcharges on many domestic flights but putting the charges into increased ticket prices, according to airfare analyst Rick Seaney, chief executive officer of FareCompare.com.
He tells USA Today that “we have seen a tectonic shift in domestic airfares but it's not great news for consumers, because the major airlines have, for the most part, simply shifted the surcharge amount into the base airfare.” Evidence: American Airlines dropped its $170 fuel charges for a select round-trip ticket from Dallas/Forth Worth to Washington on Nov. 1 but by Nov. 6 the previous $680 ticket price had gone up to $850.
The airlines' moves provide “a bit more transparency” in prices, Seaney says, but the wide range of surcharges also shows that the run-up in domestic fuel surcharges the past year “had everything to do with competition and the need to raise ticket prices.” Airlines say they began the fuel surcharges because they were hit by record fuel costs. Yet, the industry projects it will lose billions of dollars this year.
Given this “financial disaster” that many airlines are facing, “shifting the name from ‘fuel surcharge’ to “fare” isn’t ripping the public off,” asserts aviation consultant Michael Boyd. A US Airways spokeswoman tells the newspaper that the full price of a ticket—not the surcharge—is what matters. “We still need to be able to charge enough for our product to be profitable,” a United Airline spokeswoman says, “and we aren't there yet.”
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