5 reasons airline fuel surcharges are “bogus” — It’s not a fuel surcharge, it’s a fare increase

by Janice Hough on March 2, 2011

British Airways has already raised fare surcharges twice this year, and another increase has been announced. Other carriers around the world seem to be following suit. Taxes and fuel surcharges on some international tickets are in the $500-$700 range.

First off, let me say that I am not without sympathy for the airlines as oil hovers around $100 a barrel and soon more. I am, however, without sympathy for airline deception — fuel surcharges are dishonest.

Here are five reasons why it matters for travelers who might say, “So what, as long as the final price is the same?”

1. Fuel surcharges are another excuse for misleading fare advertising. Travel agents always hate quoting a price to a client who counters with, “But I saw it for ‘blank’ on line.” Then we get to be the bad guys explaining that yes, the fare is, in fact, double what the airline advertises.

2. Fuel surcharges are not discountable for children, which can mean hundreds of dollars extra for families.

3. Many airlines charge fuel surcharges for travelers redeeming frequent flier miles. I have already had clients pay over $600 for free tickets, and confidently expect the $1,000 free ticket mark will be reached in a few short years at most.

4. Fuel surcharges are also not discountable using corporate discount or travel agent-consolidator commissions. These discounts aren’t always available, even for companies and agents that have contracts. The discounts may only be a few percent, but it adds up; especially with premium cabin fares.

5. This is in many ways the biggest reason: While not all travelers, or travel agents for that matter, know this, international carriers often allow refunds for taxes with nonrefundable tickets. This can be especially useful for those ridiculously cheap fares where the legacy carriers compete with the internet startups such as Easyjet and Wizz Air, to name just a couple.

In these cases, the fare itself might be €10 or €20 Euros, but the total ticket price over €100.00. So, in theory, passengers who cancel should get most of their money back.

That’s the theory. However, as our agency has recently learned in dealing with Lufthansa and British Airways, fuel surcharges are nonrefundable.

In the interests of keeping this a PG blog, making the fuel surcharges nonrefundable is “bogus.” If the fuel surcharge is simply an additional cost for flying a passenger, and the passenger doesn’t fly, then it should be refunded along with the taxes.

If the fuel surcharge is part of the fare, fine, then it should be nonrefundable if the fare is nonrefundable but it should also be discountable. The airlines want it both ways.

Right now, it’s the worst of all possible worlds. Corporations don’t get discounts, travel agents and consolidators don’t make any commission, passengers pay more and the airlines keep the money.

At some point, airline greed on this subject may finally prompt action. Maybe when some congressman’s daughter tries to use miles for a honeymoon and gets hit with one of these bills. Or maybe when that free ticket price hits $1,000. In the meantime, it’s just one more example of why consumers have such a negative opinion of the industry.

Photo by Kevin Hutchinson Flickr Creative Commons

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  • Jeff L

    It’s worth noting that the surcharges are also taxed differently than fares, which reduces revenue to the government.

  • SoBeSparky

    Go get ‘em Janice. Seems that any airline advertising fares in the USA is subject to USA laws. If the fuel surcharges are just another nonrefundable fee, then the attorney general should make sure they call it that. They can call it a “safety and courtesy fee” in the EU for all I care, but in the USA they should just call it “nonrefundable surcharge.”

  • DaveS

    I totally agree. I have no problem with fees that are optional, but this “fuel surcharge” is just part of the price, and makes it possible for the companies to lie about a “base” fare that is meaningless.

    I have noticed one situation when a “fuel surcharge” does have some validity. I reserved a group fare for about 20 people a couple of years ago, and the base price was guaranteed with the contract, but the fuel surcharge was not guaranteed until payment was actually made. We reserved about 9 months in advance but didn’t pay until one month ahead of travel. So I can see the need for an airline to protect itself in a case where a person is holding seats without paying for them right away, and, indeed could cancel them without penalty.

    It was a time of falling oil prices, and the fuel surcharge actually went DOWN about $175 in the interim, saving us a bundle of money.

  • Nigel

    How about truth in advertising? I don’t care how the fare is calculated, just the amount that’s going to impact my credit card. If 3 or 4 or more airlines calculate fares, surcharges, and taxes differently, the base fare, which is what is usually advertised, is totally meaningless. And sometimes trying to get final figures is difficult even for a travel agent. Which make comparison very difficult.
    I suppose I can dream!
    Keep up the good work Janice and then my dream might become a reality.

  • http://www.24travelguide.com/ John

    This is all about travel business.

  • Pingback: 32 Hidden Travel Fees and How to Avoid Them

  • vik

    I was using my miles to book a reward ticket to India in
    Club world from New York. I did the same in Nov of 2010 and the total I paid
    was $750 appx for each ticket. When I try to book now the cost of each ticket
    is $1429 (driven by fuel surcharge). The prices of crude have not doubled and BA
    is charging double the fuel surcharge. All the big US airlines continental,
    delta, etc don’t even charge you a fuel surcharge when you book using miles.
    The point of having miles is useless if you have to pay such hefty fuel
    surcharges.

  • Pingback: BA to pay lower fuel surcharge fine > Airlines >> Aeroportal

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