Tuesday, April 20, 2010

Airlines Ready to Jack Up Fares With 'Fuel Surcharges' Again?

If it's not one thing it's another.

According to Rick Seaney at Farecompare.com, airlines may be poised to slap fuel surcharges on domestic ticket prices, something they haven't done since November 2008, when legacy airlines folded these surcharges into the base airfare as the price of oil dropped dramatically from record summer highs that year.

[Delta has already added fuel surcharges to many peak summer fares, and other carriers could follow.]

With oil prices rising over $80 a barrel, surcharges are beginning to make a comeback, according to Seaney. On Monday, he said, "Delta Air Lines filed a $20 roundtrip ($10 one-way) fuel surcharge on top of their lengthy list of peak travel day surcharges, on tens of thousands of mostly smaller city-pairs with no departure date restrictions."

For example, a one-way connecting Delta flight from San Francisco to Denver or Dallas (via Salt Lake City) on May 27 has both a peak travel surcharge of $30 and a fuel surcharge of $10 tacked onto the base airfare.

"A closer inspection of the cities with this new fuel surcharge shows that airfares to/from Delta's hub cities along many non-stop routes were spared this fuel surcharge hike -- placing most of the hike on smaller markets and larger non-hub cities," Seaney said, adding:

"Airlines have been struggling to get even the smallest systemwide domestic airfare hike to stick this year. Several attempts have failed in the last few months. In lieu of significant base airfare hikes, airlines have resorted to fewer sales, peak travel day surcharges, a bevy of non-ticket fees, and the release of fewer of the cheapest seats, all in order to increase revenue.

"This new fuel surcharge filing is effectively an airfare hike as miscellaneous (peak) and fuel surcharges are added to the base airfare prices before the 7.5 percent U.S. sales tax is added on. Note that as of this afternoon no other airlines have matched the fuel surcharge increase."


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