The price of jet fuel is down, but those fuel surcharges? Nope. They’re up. [USAToday] (Thanks, J!)
More From Consumerist
-
Fuel Costs Not Going Up That Fast But Airlines Like Tacking On Surcharges Anyway
-
Airlines Cutting Number Of Available Seats On Trans-Atlantic Flights To Support Higher Fares
-
Prepare To Pay $100 For Your Second Bag If You’re Hopping The Atlantic With United
-
United, American Airlines Accused Of Using Sham Businesses To Avoid Millions In Taxes
-
Worst Company In America Round 1: Spirit Vs. American Airlines
with good reason. A LOT of airlines bought fuel in advance at locked in prices when it was expensive and now have a ton of expensive fuel.
A REALLY bad business move by very shortsighted businessmen.
@OletheaEurystheus: Actually, no. Fuel hedges don’t require the airlines to purchase the fuel at that price. It only gives them the OPTION to. So if the fuel drops below that price, the airline will just buy non-hedged fuel. Though they are out the cost for buying the rights.
@LeticiaDivine:
Smart ones do…but they also give the hedge-giver the option to back out if oil goes up too much…
Continental bought committed hedges at $140 because they thought fuel was still going up…too bad they bought 90% for the next 4 years at that price.
@LeticiaDivine: A lot of the ones who bought hedged fuel bought it in a way that they could not buy non-hedged fuel. They bought almost 80-95% of their fuel hedged for 2-5 years at over 100 dollars a barrel.
Only the smaller carriers where smart and either didn’t hedge most of their fuel, or hedged it at a REALLY low price.
@OletheaEurystheus: I thought they did this because it was the only economically feasible way to buy fuel for flights, since oil fluctuates often and tickets are sold in advance? I remember Delta running a campaign complaining that speculation was driving up the price of oil futures, and thus the cost of the fuel they were buying in advance.
I know very little about the topic, correct me where I am wrong.
I’ve noticed fuel surcharges are still present on shipping as well. UPS just got me for an additional ~10% when I used ground shipping.
@nataku83: Which is a good reason to use the Post Office. Although what you send might not get there or get there at some time in the unknown future.
@nataku83:
FWIW, Fed/Ex still fuel surcharges as long as diesel is over $1.14 a gallon..talk about raping the customer with the gas nozzle…
[fedex.com]
*sigh* I still dont see why the *ticket* price doesn’t include fuel. Sad.
@Geekybiker:
Because then they wouldn’t any “cheap” airfares that they could advertise.
@Geekybiker: You would think that, but you may reconsider after reading this: [www.boeing.com]
$50,000 / trip doesn’t add up very fast when you take away interest on that type of money, then take away money for fuel, paying staff, etc. This is definitely part of the reason airlines are bleeding money like nobody’s business.
@Geekybiker: Actually..it does. In the USA, fuel surcharges have to be built into the advertised price of a ticket. The only people this affects is business accounts and the fixed rate for city-pair contracts airlines have with the government
Two words: Oil futures.
Two more words: Loss recovery.
@The_Gas_Man: Several more words: “consumers have gotten used to paying extra”. Why give up an extra revenue stream after getting customers used to the idea of paying more?
I don’t know if your readers care, but I understand that Westjet in Canada has yanked their fuel surcharge already, as well as BC Ferries.
Crazy Americans and your price gouging ways…
Not to make all of you Americans jealous, but both WestJet and Air Canada dropped their fuel surcharges when oil dropped below $100.
The saying goes: “Price gouging doesn’t happen too much when prices are going up. They mostly happen when prices are going DOWN.”
Think of it as a required tip.
What bothers me more is how NW, and especially US Airways said the bag surcharges are due to high fuel costs..yet some airlines just DOUBLED their 2nd bag fees!
That being said, oil has dropped, but jet fuel is still up there…it’s all about crack spread*
*no relation to Joe the plumber
I DONT CARE! Im so sick of seeing all these pathetic stories about the plight of major airlines. After years of piss-poor service, delays and price gouging, they have dug their own graves. I recently discovered the gem that is AMTRAK. Fair prices, top notch service, and no TSA bs.
I can now laugh maniacally from the cabin of my sleeper car as I watch Delta die a slow and painful death.