Memo to airlines: stop whining about “high” fuel prices

by Christopher Elliott on October 10, 2008

The airline industry continues to whine about the high cost of fuel. Too bad no one is listening.

Here’s why.

The price of jet fuel is falling faster than a plane without a propeller.

To claim that energy prices are to blame for the intolerable state of air travel is an insult to the intelligence of passengers. So airlines, listen up.

Don’t tell us you’re moving to “a-la-carte” pricing because of high energy prices. If you’re paying more for jet fuel, it’s probably because you hedged at the wrong time.

Don’t tell us you have no choice but to pile on the surcharges. The truth is, you’ve been waiting for an opportunity to do this.

If you can’t make money, please don’t blame high energy prices. Your ancillary fees are expected to generate hundreds of millions of dollars a year.

Above all, please don’t tell customers that they wanted it this way. Don’t tell us everything is just fine.

In fact, stop talking. Please.

Just shut up and fly the plane.

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Tagged as: airline, fuel, lie, price

  • hey

    duh!
    what else is new
    better late then never i guess

  • Frank

    To claim that energy prices are to blame for the intolerable state of air travel is an insult to the intelligence of passengers. So airlines, listen up.
    Don’t tell us you’re moving to “a-la-carte” pricing because of high energy prices. If you’re paying more for jet fuel, it’s probably because you hedged at the wrong time.
    Don’t tell us you have no choice but to pile on the surcharges. The truth is, you’ve been waiting for an opportunity to do this.
    If you can’t make money, please don’t blame high energy prices. Your ancillary fees are expected to generate hundreds of millions of dollars a year.
    ====================================================

    The THIRD QUARTER just ended……..let’s see who posts any PROFITS.

    Also, your chart above only conveys 10 months of fuel activity. PULL UP Fuel costs three or four years ago. HUGE DIFFERENCE. Especially when you have an aircraft sucking down 700 gallons an hour at current prices. Most Airline business models will show a loss this quarter and with the economy troubles, who knows? YOU?

  • R.E. Ullrich

    How else are the upper-level managers to spread their Golden Parachutes?

  • http://www.travel-rants.com Darren Cronian

    I have ranted about this issue some months ago when the price of oil started to reduce in price, since then it has come down in price even more and theres not a whimper of anyone reducing fuel allowances.

    I’m informed by someone within the airline industry that this will take some time to come down as airlines balance their books, but in my mind it means that they will wait til they can see what their profits before making a decision.

    On the other hand Ryanair are again offering £1 seats. Crazy considering the current financial climate.

  • aliasbuck

    Frank said: “Also, your chart above only conveys 10 months of fuel activity. PULL UP Fuel costs three or four years ago. HUGE DIFFERENCE. Especially when you have an aircraft sucking down 700 gallons an hour at current prices. Most Airline business models will show a loss this quarter and with the economy troubles, who knows? YOU?”

    Frank – three years ago is not when the fuel surcharge was added, nor was the fuel cost three years ago the blame. The blame has been laid for the last year.

    For example, from a June press release from Delta: “The price of fuel has nearly doubled in the last year, causing considerable financial stress to Delta’s business. As a result, Delta is implementing initiatives across all areas of the business to mitigate the extraordinary run up in fuel expense,” said Jeff Robertson, managing director of Delta’s SkyMiles Program. “This was a difficult but essential decision in the face of record-high fuel costs. We hope this is temporary, and should fuel prices subside from current levels, we will reevaluate this surcharge.”

    Therefore, Christopher’s chart IS valid.

    So fuel is down to what it was in February and is rapidly approaching the cost from a year ago. So why aren’t the airlines lowering the fee if it’s really about the cost of fuel?

    Look at Christopher’s chart for fees instituted since the spring that do not include fuel surcharges for help finding the answer: http://www.tripso.com/today/what-are-the-greediest-us-airlines-heres-a-helpful-guide/

    Or how about Rick Seaney’s chart on fuel fee vs advance purchase. Note that it varies quite a bit and doesn’t seem to be keyed against the cost of fuel, nor is it a flat fee. If it was about the cost of fuel, it would be one or the other.

    Truth is, it’s about the cost of business to do everything else and about price competition, not fuel. I don’t think people mind paying a fair price and airlines charging what they need to to stay in business, but they do mind being lied to.

  • aliasbuck
  • Frank

    On October 13th, 2008 at 1:46 pm aliasbuck said:
    Frank – three years ago is not when the fuel surcharge was added, nor was the fuel cost three years ago the blame. The blame has been laid for the last year.
    ========================================================

    Many carriers were exiting bankruptcy several years ago. If not most of the industry. They based their (exit) plans around fuel (they’re highest cost next to labor)that was 50 dollars CHEAPER then it was the past few months. Yes, it’s gone down from it’s high of 140+……….but no one imagined that oil would top 78 dollars a barrel, three years ago. 78 seems cheap now, but in reality, airlines were paying under 50, several years ago.
    And, more importantly, who says it wont go up, that high, again.

  • Frank

    On October 13th, 2008 at 1:46 pm aliasbuck said
    So fuel is down to what it was in February and is rapidly approaching the cost from a year ago. So why aren’t the airlines lowering the fee if it’s really about the cost of fuel?
    ======================================================

    Most airlines reduced capacity in ANTICIPATION of the economic troubles that lie ahead. Years ago, airlines could and did fly around half empty planes during economic downturns. NOT today. Full flights dont equate to profitable ones, not if everyone is not paying enough to cover costs!!!
    And, WHY WOULD THEY LOWER FEES WHEN MOST CARRIERS DID NOT MAKE A PROFIT in the highest TRAVEL season of the year, the summer! LOAD FACTORS drop off, traditionally after the summer rush until the WINTER HOLIDAYS. Again, after the WINTER HOLIDAYS.

  • Frank

    CASE IN POINT: http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D93QVGI00&utm_source=markets&utm_medium=rss

    here come the results of what is usually one of the best quarters for airlines….july, august and sept.

    Delta LOST roughly a HALF MILLION dollars a DAY.

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  • http://crash456.blog.co.uk/2009/10/13/high-fuel-prices-is-there-any-alternative-7158345/ Jonathan Paul

    Thanks Christopher for such a nice post about how high cost fuel give losses to airplanes .
    :-)
    Keep blogging

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