Tuesday, May 24, 2011

The Truth About Airline Fuel Surchages

(image credit: flyforfun/flickr)
SmarterTravel.com published an interesting article about the arbitrary pricing of fuel charges added to the price of airline fares. With how complicated airfare pricing has become this article sheds some additional light on the subject. Here are parts of the article:

The truth is that the only figure that matters is the total price—base fare plus fuel surcharge—and looking at either separately is rank idiocy.
(image credit: josepha/flickr)
Here's the problem. Some airlines, mostly based outside the United States, are splitting their true fares into a phony base fare plus equally phony fuel surcharges. As a case in point, I checked flights from San Francisco to Munich, leaving May 16 and returning on May 30, through both Lufthansa and United. Here's what I found:
  • Lufthansa's total round-trip fare for the route's only nonstops was $2,140, figured as a base fare of $1,560 plus fees and taxes of $580, of which $420 was for a "fuel and security" surcharge.
  • United's total round-trip fare for the exact same flights, but sold as a United flight through a Lufthansa codeshare, was also $2,140, this time figured as a base fare of $2,013 plus taxes and fees of $127.
And there you have the story in a nutshell.
The real fares on either line are virtually identical. The two lines just chose to present the fees differently: honestly on United, not so honestly on Lufthansa. Parenthetically, both lines offered lower fares on some connecting itineraries, but fares to Europe really are high this summer.
When you ask an airline why it goes through this charade, you get a long sermon about fuel costs, but that doesn't really answer the question. The question is why they don't just raise fares to cover increased fuel costs, the way U.S. lines (and most other businesses) do—why instead they split the real fare into two components, and they never answer that.
Visit for smartertravel.com for the complete article by Ed Perkins who also offers theories regarding airline fuel charges.


Related Posts Plugin for WordPress, Blogger...