As the price of gas falls, many travelers are wondering when airlines or cruise lines will drop their controversial fuel surcharges or extra fees.
The answer may be: never.
It’s not that prices may not come down. There have already been a few airfare sales, and cruise lines are offering all kinds of specials, even around the holidays, in this increasingly weak economy.
But they’ll keep those surcharges as long as they can.
Why? Because they go directly to the bottom line, and can be pure profit.
It may not matter to you as a consumer how a price breaks down when booking a ticket, as as long as the final price is acceptable.
But if you are a large corporation with a negotiated airline discount — and yes, though airlines don’t want to talk about it, those are still out there — it makes a difference. Because a 15 percent discount, for example, is off the base price only. There’s no discounting taxes, security fees or fuel surcharges.
Similarly, while most airlines have gotten rid of basic commissions, many airlines are privately contracting with some travel agents and consolidators. Airlines also contract with most big tour operators. They might pay as little as three percent, but it could be ten percent or even more, especially for international travel. But again, the commissions are only off the base fare. So airlines figure, why pay an extra $20 or so on a $200 higher fare when you can pay nothing on a fuel surcharge?
And in that mindset, why put the costs of pillows, food, sodas, and checked baggage into the fare, just for starters? Of course, as an airline, it’s more wear and tear on your employees, but when in recent memory have most airlines ever been about their rank and file employees?
Cruise lines have been playing this game for some time. If you have ever received an invoice directly from a cruise line, or a copy from your travel agent, you will probably notice a bewildering array of numbers. These numbers can include the fare, government taxes, fees, NCFs (noncommissionable fees), port taxes, air taxes, and of course fuel surcharges. Again, it may not matter to consumers, but on our agency bookings I have seen, for example, a supposed 13 percent commission end up being less than 4 percent of the total.
In the end, the costs will likely come back to consumers. Corporations will cut business travel as non-discountable costs rise. More tour companies and travel agencies will go out of business. For others, service fees and prices will go up as commissions go down.
And another bonus for the airlines, fees can even be added to free mileage award tickets, especially the airport and onboard charges. But I wouldn’t bet against future fuel surcharges even on “free” tickets.”
Don’t get me wrong, I understand that these days airlines need to do what they can to survive. But as a travel agent who long ago realized that airlines would whatever they could to eliminate their “travel partners,” I know this isn’t just nickeling and diming.
This is another effort to keep from sharing the dollars.
