British Airways Semi-Explains Why They’ll Keep Hitting You With Big Fuel Surcharges Even Though Fuel Prices are Dropping Like a Rock

Fuel surcharges aren’t about fuel.

  • They are a convenient, easy way to raise or lower all fares in a market.
  • Since they are a surcharge rather than part of the fare, they aren’t subject to percentage discounts that may attach to certain contracts.
  • They conveniently are an excuse to charge more for award passengers (in some programs and for travel on some airlines), whose mileage currency can’t be used anywhere a member wants the way cash can.

Airlines have used the price of fuel as the narrative for high costs, and explain surcharges rather than changes in fare as fuel (even though when coded as “YQ” they are ‘miscellaneous’ charges in the fare construction), it’s becoming tough for the storyline that attaches to these fees.

Air Canada solves this by just changing the name of the fee to the empty phrase ‘carrier surcharge.

Skift reports that Japan Airlines is reducing their surcharge February 1. What’s more interesting to me is that Skift gets British Airways’ parent company on the record doing backflips to explain all the reasons that they won’t reduce the fuel surcharges even with lower fuel prices.

“The fuel surcharge has never recovered the rise in our airlines’ fuel costs since the oil price started increasing more than 10 years ago,” said an IAG Spokesperson. “The current decrease in fuel prices does not have an immediate, noticeable impact on our airlines given that we hedge a significant proportion of our fuel. In addition, the US dollar has strengthened recently against the euro and sterling, partly offsetting any savings that the lower prices may provide.”

So it’s never been about the cost of fuel, and we’ve never really made up for higher costs. We bet on commodity markets anyway, so derivatives trading. And currency markets (which we apparently don’t hedge). And stuff. Oh, look, shiny things!


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I want to be a spokesman for a major airline like BA. I’m really good at saying nothing while giving my words a sense of realism. And the non-rev status would be fun!

  2. Is there any agency like the DOT in the UK? I give this person credit for honesty. “Basically, the FSC is a great way to raise revenue/fares without the messy publicity, filings or negotiated discounts. I know corporations rule the world, but could the brave watchdogs at least make them drop the insulting name for the surcharge?

  3. Did anybody even review that press release before going public? It’s the most nonsense statement I’ve ever read. I would have respected them more with a statement along the lines of “not lowering surcharges cause people will still pay them and we like making money. Thank you for your business”.

  4. i’m okay with carriers calling it anything they want. they can even call it “highway robbery surcharge” and i’m fine.

    2 things i’m not fine though :

    1. advertise airfares without fuel surcharge

    2. apply the surcharge onto award tickets, so that “free” flight you’re trying to redeem comes with $1000 co-pay, on top of taxes

  5. The fuel surcharge name here at BA has been changed to better reflect our intentions and update consumer perception
    “Greedy Snake Surcharge”

  6. Can someone explain to me why this is even legal? They’re just lying about their real prices with this device. Everything that the customer cannot avoid, except for government imposed taxes and fees, should be required to be in the price, period.

  7. @patricia and @DaveS Here in the US, “revenue” fares must include all carrier surcharges *as well as* any government/airport taxes.

    That’s pretty transparent, don’t you think?!? 😉

  8. BA outlandish fuel surcharges prevents me to fly BA flights or going to London. I visited many countries but I refuse to give in to their fuel surcharge.

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