Will more carriers follow Japan Airlines’ lead and lower fuel surcharges?
In recent months, we’ve finally seen a major decrease in the price of crude oil — the lowest it’s been since summer 2009, in fact. Because of this, everything from driving to heating your home has gotten cheaper. While the general population may be giddy at the good news, frequent flyers aren’t exactly jumping out of their overpriced economy seats just yet.
Some searching on your favorite flight aggregator will show that most airlines are still charging hefty fuel surcharges, despite the shift.
There are a number of reasons airlines refuse to do a mark down. While some claim they still haven’t covered their losses from past oil price spikes, others are making up for local currencies not matching up to the strength of the US Dollar, the currency in which fuel is priced. When tickets have hefty fuel surcharges, it also means less of the ticket gets taxed. Other airlines use a technique called hedging, which involves purchasing their fuel ahead of time to lock in a certain rate that may seem good for, say, a year. The good news is once these contracts are up, cheaper prices can be set up, hopefully (but not definitely) meaning cheaper prices for consumers.
If you’ve never looked at the cost breakdown of your travel fare, know this: fuel surcharges range from about$30 to more than $500 for a long-haul premium flight, according to the Independent. This means sometimes half your ticket is going to gas, or so they say.
Some good news: Japan Airlines (JAL) recently announced it would be lowering fuel charges beginning February 1. However, the question remains whether this will actually mean consumers will pay less for their tickets, or whether the cost will simply be transferred into the base price. If the latter is the case, it matters little to paying flyers. However, members of certain frequent-flyer programs will rejoice if fuel surcharges drop, even if overall prices remain the same.
While airlines like Southwest, United, TAM, LAN and JetBlue don’t charge fuel surcharges on awards, many do. And some airlines (ahem, Virgin Atlantic) charge such exorbitant fees it almost renders award tickets useless. There are hacks to get around fuel surcharges on some airlines, but overall they can be a major headache. Lowered fuel surcharges would make many frequent flyer currencies more valuable.
For the most part, those of us who aren’t nerdy enough to start getting into the ultimate hack of “fuel dumping,” will just have to hope more airlines follow JAL’s lead.
