There’s a lively debate in the blogosphere about when the travel industry will withdraw some of the fees imposed after fuel prices took off earlier this year. With energy prices on a downward trajectory, shouldn’t the surcharges be on their way out, too?
You would think so.
Matt Phillips at The Wall Street Journal’s Middle Seat Terminal raised the question yesterday morning in a post titled Will Fees, Fares Follow Falling Fuel Costs?
Fuel costs. That’s been the explanatory mantra among airlines cutting capacity, slowly increasing fares and slapping on fees in recent months. So if fuel costs fall, surcharges and fees should evaporate and fares should fall back to where they were over the last couple years, right?
Mark Ashley wondered the same thing. “With oil entering a bear market (a 20% correction from its peak), will we see some of those fees rolled back?” he wrote.
Rick Seaney is the latest to ask that question. He suggests there’s a “magic number” to which oil prices have to drop, where airlines would start “rolling back at least SOME of those ire-inspiring fuel-related fees and surcharges.”
The correct answer is: the fuel surcharges may ease — but the fees are here to stay.
As I’ve pointed out in several posts — here’s the latest one — airlines have always wanted to charge extra for pillows, blankets, soft drinks and reservations. They used higher fuel prices as an excuse to do so.
Why would they pull back now, when they’ve just begun to tap a new source of revenues?
I should note that virtually none of the blogging debate has dealt with the fuel-related fees on cruise ships, which are ridiculously high and could soon translate into pure profit. I wonder if the likes of Carnival and Royal Caribbean will face similar pressure to ease up on their fees?
So to anyone who believes the fees are headed toward the exits, I say: just wait. If anything, we will see more fees in the future, not fewer.
