Are $600 Fuel Surcharges on the Horizon?


More airlines have announced their financials for the second quarter of this year, and the details range between the ugly and horrifically ugly. JetBlue came in with a $7 million loss, US Airways chipped in with $567 million in the red, and United lost a staggering $2.7 billion. These announcements follow similarly dismal reports from American and Delta last week.

But do you want to know what's really weird about these numbers, aside from their sheer magnitude? Most of the airlines mentioned above actually increased their quarterly revenue year-over year. So where is all the money going? Two words: jet fuel.

JetBlue, which lost a paltry sum compared to its peers, saw a nearly 64 percent jump in fuel prices year-over-year. US Airways' increase was more than 65 percent. United reported a 55 percent hike, which amounts to a $773 million increase in fuel costs across United's operations. With fuel costs rising at this speed, what's an airline to do?

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According to FareCompare CEO Rick Seaney, United has an idea: fuel surcharges, and not small ones, either. He reports that United added an $80 surcharge to all domestic flights departing after January 10 next year. This comes on the heels of US Airways CEO Doug Parker predicting fuel surcharges north of $600 (!!!) before too long. (But at least Parker did say we won't have a "cataclysmic liquidation of a big-six carrier." Thanks, Doug!) The message here is that more and larger fuel surcharges seem to be inevitable, given the airlines' inability to overcome fuel costs with good, old-fashioned fare hikes and fees.

Of course, caught in the middle of all this wild financial talk and bleak prognostication are ordinary travelers like us. If Parker is right, and fuel surcharges sniff $500 or $600 by winter, are we really looking at $800 airfares between New York and L.A.? I don't want to cause panic in the streets by saying this, but the answer, in that case, would be yes.

So what, pray tell, are we supposed to do? Same thing we always do: Pay attention to the news, compare prices, and squeeze every last ounce of value we can from our travels.

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