New Jersey Senator Robert Menendez recently wrote a letter to the heads of all major U.S. airlines in which he implored them to reduce fuel surcharges in light of declining oil prices. In it, Menendez points out a fact many of us, myself included, have noted over the past few months, saying, “If the price of jet fuel, which reached $4.34 per gallon in July, prompted fare increases and schedule reductions, then it should also spur a roll back of surcharges and fees, as the price per gallon dropped to $2.34 last week.”
“American families are struggling,” Menendez wrote, “dealing with job losses, falling home values, and a financial market that is erasing their retirement savings. It is crucial that you pass on the savings seen from falling fuel prices as quickly as possible. Now is not the time for Americans to be priced out of traveling—that is simply unfair to families who want to spend the holidays with their loved ones and it is bad for our economy in need of a boost.”
According to The New York Times, David Castelveter, spokesman for the Air Transport Association, disagrees with Menendez’ belief that declining fuel prices should equal declining fares. “It’s premature to expect that fares and fees will be where they were before fuel prices increased,” Castelveter tells the Times, echoing airline executives’ claims that fuel prices are too volatile to reliably predict, which makes it difficult for them to lower fares too quickly.
It’s amusing to me that airlines would are using “volatility” to excuse themselves from lowering fares, and for one simple reason: Volatility was exactly the justification for raising fares and adding fees earlier this year! It seems airlines will only respond to fuel volatility when it allows them to charge more, doesn’t it? After all, an uncertain fuel market didn’t stop airlines from jacking up the cost of flying in the spring and summer.
But beneath this point-counterpoint argument (the Senator Menendezes of the world vs. the airlines) is the fact that our airlines today are viewed as both businesses and a public service, and needless to say this duality causes friction. It’s in the airlines’ best interest to squeeze as much cash from their customers as they can, but at the same time our large country has come to rely on commercial air service as its primary form of long-distance transport. As Senator Menendez said, many families who want to spend their holidays with their loved ones need air travel to do so. This places the airlines’ best business interests in direct opposition to the best interests of their customers.
Me, I’m with Senator Menendez on this. There needs to be a compromise between the airlines and the flying public, and that should include airfares based, as much as possible, on current market conditions. And, as the Senator says in closing his letter, “If you [the airlines] tell the public that you need long-term higher prices to survive, I urge you at the very least to do it directly through fares rather than a collection of confusing and hidden fees.” Amen to that.