by Al Vaughters
When the price of fuel — diesel, jet fuel, and gasoline; was spiking toward an all-time high, many businesses created fuel surcharges to offset the bite those fuel costs were taking out of their bottom line.
Now that price of fuel is tanking, many consumers want to know they still have to pay those surcharges.
Ironically those surcharges are in highly competitive fields, such as the airline industry, which is turning huge profits, as is package delivery. Authorities say fuel surcharges, that were imposed when fuel hit $100 a barrel, help those businesses keep a lid on their other consumer charges — such as airfares and shipping; but that could be changing.
Profits for US based airlines took off to new heights last year: In the first 9 months of 2015, they cleared $18 billion, including add-ons such as baggage fees that amounted to $3 billion.
Airline passenger Rita Moss wants a break from those add-ons “With everything from the seat to the baggage to everything being on as extras, and the prices are still not decreasing.” But with jet fuel prices plummeting and profits soaring, why do the airlines still have a fuel surcharge in their fee schedule? They say to hold down fares, but they still raised them.
Jean Medina, a spokesperson for Airlines for America, an advocate for the airlines said airlines’ profits ebb and flow–while they turned a collective profit of $18 billion last year, they lost $29 billion 10 years earlier in 2005.
“What is good news for consumers is when airlines are profitable, customers, the communities, and investors and employees win because they are re-investing the money back into the business,” adding the airlines created 10,000 new jobs last year.
It is not just the airlines that are holding on to those fuel surcharges, many big city cab companies still have them. Package carriers, UPS and Fedex have even raised their fuel surcharges, saying with the growth of Internet retail they are delivering more parcels to residences, which is more costly.
As for the airlines, Charles Leocha, spokesman for Travelers United, an airline watchdog group says it is a downside of airline de-regulation, and just another way of padding their bottom lines. Airline Fuel Surcharges charged by the airlines can be as little as $300 to as much as $1200 or more for tickets on international travel – and that is per person.
Unfortunately, some US based airlines are now re-classifying the fuel surcharge as a “Tax Surcharge” and not as a fuel surcharge thereby being able to say that they do not anymore charge Fuel Surcharges. They are also calling it a variety of terms – from a “carrier-imposed charge”, “airline surcharge” to “international/domestic surcharge”. Surcharges that are still bottom-line adding to their already profitable pockets – thank you baggage fees and no more free meals!
“The fact that oil now has dropped to such a low level has really given these corporations a windfall profit, and some of that, you would think, might be shared with the consumers – either in the form of lower fees or lower airfares or perhaps by giving us a couple of extra inches in the airplane.” @wbbrjp
A couple of Japan based airlines announced they are dropping their fuel surcharges — Bloomberg Business is reporting All Nippon Air (ANA) and Japan Airlines are making that move, including Australia based Qantas Airlines – but still no word from US air carriers.
Jets burn kerosene – refined from crude oil the same as gasoline–which is the largest single expense for the airlines.
“Do not go where the path leads, travel instead where there is no path and leave a trail.”