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One Airline Does Right Thing, Cuts Fuel Surcharges

SmarterTravel

Fact: In many parts of the U.S., the price of a gallon regular gas has fallen below $3 at the pump.

Fact: Crude oil prices are the lowest they’ve been in five years.

Fact: Fuel accounts for almost half of most airlines’ expenses.

Given those facts, it would be logical to conclude that ticket prices and fuel surcharges were bound to decline, as the airline’s cost savings are passed along to consumers. So far, however, airlines have reduced neither airfares nor fuel surcharges.

Given the nature of a relatively free marketplace, it’s no mystery why airfares remain stubbornly high. The combination of a recovering economy and airline capacity discipline has brought supply into alignment with demand, giving airlines the power to maintain their higher prices.

The fuel surcharges are a different matter entirely. The surcharges, which can add $500 or more to the cost of both paid and award tickets, were imposed by many airlines in the mid-2000s, in response to a surge in fuel costs. That surge is long past, and the fuel-price pendulum has now swung in the opposite direction.

But with a single exception, fuel surcharges—which by definition are supposed to be keyed to the airlines’ fuel costs—have remained unchanged.

That exception is Japan Airlines, which this week announced that it would be lowering its fuel surcharges for tickets issued on and after February 1, 2015. The airline explained the shift as follows: “JAL introduced fuel surcharges in February 2005 in response to rises in the cost of fuel. If the fuel price fluctuates further, we will amend or delete the fuel surcharge on a bimonthly basis.”

With the changes, JAL’s fuel surcharge for flights between the U.S. and Japan will decrease from $259 currently to $173, each way. That’s a step in the right direction, to be sure. But it also raises the question: How low must fuel prices fall before the surcharges are eliminated altogether?

That’s a question not just for JAL but for all airlines that continue with the disingenuous practice of imposing fuel surcharges. The fact that the extra fees have outlived the increase in fuel costs confirms the suspicions of many consumers that the surcharges were nothing but a gouge, or a way to disguise the real price, or both.

Reader Reality Check

Is the cost of fuel an “extra” or simply another cost item that should be covered by the published airfare?

This article originally appeared on FrequentFlier.com.

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