All Chinese Airlines Eliminating Fuel Surcharges on Domestic Flights — and What it Means for Your Award Ticket Costs

China’s civil aviation administration announced that fuel surcharges will be eliminated on domestic flights effective February 5.

Chinese carriers will this week scrap fuel surcharges for domestic flights for the first time since late 2009 after fuel costs fell below a government-set level.

Air China, China Eastern Airlines, China Southern Airlines and other carriers will abolish the surcharge from February 5, a spokeswoman for the Civil Aviation Administration of China (CAAC) said.

Here’s what fuel surcharges are and how they work.

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.

Nonetheless, since airlines have used the price of fuel as the narrative for high costs, and explains 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.

Some airlines are just calling them ‘carrier surcharges’ .. replacing the name.

But we’ve seen Australian carriers drop these on specific routes, and the Philippines outlaw them on tickets originating in that country (which presents an award redemption opportunity).

A year ago I predicted that we wouldn’t see fuel surcharges spread to US frequent flyer programs more than they already had. Now we’re seeing some fuel surcharges disappear, no longer sustainable with fuel prices dropping so dramatically.

  • Make no mistake, they’ll come back if and when fuel gets more expensive.
  • The elimination of fuel surcharges doesn’t make paid tickets cheaper, the surcharge goes away but the fare goes up.
  • The consumer benefit is in award tickets, because airlines can’t add a fuel surcharge easily to award travel that doesn’t exist on paid tickets.
  • Some airlines will be reluctant to give up the cash or let members benefit, and will charge arduous ‘carrier surcharges’ instead.


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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Pingbacks

  1. […] Delta was, and continues to be, my primary. I am Diamond Medallion for this year, next and on the way to 2017, marching to 2 Million Miler and as I have some paid business class travel, SkyMiles 2015 has some value to me. At Diamond earning levels many domestic trips come out roughly break-even revenue-based 2014 versus distance-based 2015. I dislike Delta’s arrogance, however in-flight experience and operations are good. SkyMiles awards have overall improved for me in 2015, and would improve a lot if Chinese airlines dumped their international fuel surcharges as they have been forced to do domestically. […]

Comments

  1. > Fuel surcharges aren’t about fuel.

    Uh? Did you miss all the press releases and interviews that the airlines had when they introduced such fees? Not a single one that I can recall said anything but that they were about FUEL.

    Is it too much to ask for integrity on your blog and holding airlines to the same standard?

  2. @john, Gary used the present tense in saying they “aren’t” about fuel. He didn’t say the airlines never said they were about fuel at the start. That’s been a fiction for some time now, though. They became simply a way for airlines to lie about their prices, and in the U.S. when the government no longer allowed that (requiring the full cost to be stated upfront), they became a device to do the things Gary explains in his following paragraph. I have never understood why it is legal to utilize this deceptive method anyway, and avoid award flights that impose this junk fee.

    Or maybe you were writing ironically and I misinterpreted your comments.

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