Airlines increase surcharges, cut the perks
By Dave Hannon -- Purchasing, 6/12/2008 2:00:00 AM
As airlines continue to face skyrocketing fuel costs, many are continuing to create new surcharges or increase existing ones, while also cutting many of the perks or extras that business travelers are accustomed to.
In May, both Delta Air Lines and American Airlines raised fuel surcharges, this time by $20/roundtrip, to recoup rapidly rising fuel costs. Fuel surcharges on some flights are now in the $130 range for a roundtrip ticket. Germany's Deutsche Lufthansa has increased its fuel surcharge to $126 for longhaul flights and $32.50 for all flights in Europe. British Airways' highest surcharge is in the $150/flight range.
Rick Seaney, CEO of airfare research site FareCompare.com, told the Associated Press that the increases mean that fees and taxes together now cost more than the actual base fare on some short-haul flights.
The increased costs being incurred by airlines are also forcing many to cut every conceivable perk or cost that is not related to safety. Delta Air Lines is closing nine of its VIP lounges in the U.S. and U.K. to reduce costs.
Airlines are also reducing the number of flights in an effort to control costs. Reuters reports that in April United's capacity on North American routes fell 6.5% from the year-ago period and Continental Airlines trimmed its domestic capacity by 2.9% in April. JPMorgan says by this time next year, there could be as many as 20% fewer seats available due to capacity reductions.
Airlines increase surcharges, cut the perks
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