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With $30 Oil, Why Do Some Airlines Maintain Fuel Surcharges?
Airline fuel surcharges have begun to largely disappear. Carriers have eliminated them as oil prices remain low. But there are a few airlines that are hanging on to fuel surcharges, and some, like Qantas, that built surcharges into their base fares and haven’t significantly adjusted them downward. Why do some airlines maintain fuel surcharges and why haven’t they shared the benefit of lower prices with consumers? There are several reasons... (airinsight.com) さらに...Sort type: [Top] [Newest]
Much more profitable than cleaning planes and providing decent seats.
Two main reasons haven't been mentioned in the article.
1) Fuel surcharge is often charged for award tickets. By having a fuel surcharge that sometimes is higher than buying a ticket in cash directly (special fares can come with "reduced" fuel surcharges) quite a lot of revenue is generated by something that should be free to the passenger.
2) Discounts to bulk purchasers are usually given based on the base fare, not the fuel surcharge. High surcharges effectively reduce the negotiated discount.
3) Any kickbacks or commissions will be paid based on the base fare, but not on the fuel surcharge.
Some countries have picked up on this scam and have fixed the fuel surcharge based on the current cost of fuel (Japan, Hong Kong) or outright banned a fuel surcharge on award tickets (Brazil). Most other countries are still like paradise for the airlines, though.
1) Fuel surcharge is often charged for award tickets. By having a fuel surcharge that sometimes is higher than buying a ticket in cash directly (special fares can come with "reduced" fuel surcharges) quite a lot of revenue is generated by something that should be free to the passenger.
2) Discounts to bulk purchasers are usually given based on the base fare, not the fuel surcharge. High surcharges effectively reduce the negotiated discount.
3) Any kickbacks or commissions will be paid based on the base fare, but not on the fuel surcharge.
Some countries have picked up on this scam and have fixed the fuel surcharge based on the current cost of fuel (Japan, Hong Kong) or outright banned a fuel surcharge on award tickets (Brazil). Most other countries are still like paradise for the airlines, though.
For no different reason that gasoline companies. PROFIT - as driven by shareholder expectations. Plenty of greed to go around! This is a more complex (ie: societal) problem that "consumers vs big oil"
No moral compass just like Martin Shkreli?
Probably because few people are aware the surcharges are happening. A good round of national news attention likely would make a difference.
The prices are and will remain low for a long while, the airlines should remove the surchages as quickly as (they were to add it) when the oil prices were high...