Oil is lower. Will airline fees be dropped?
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I’ve been in South Carolina these past few days. When the Lundberg Survey of gasoline prices in the United States comes out, South Carolina is often near the bottom. (Tulsa, Oklahoma was last week’s winner.) But falling oil prices plus lower taxation/distribution costs make fuel cheap here. ($3.49 is the lowest I’ve seen.) These low gas prices got me thinking:
With fuel prices dipping lower, the primary justification for the airlines’ litany of fees and customer-unfriendly policy changes is melting away. Every airline CEO has blamed fuel prices for the need to nickel-and-dime the self-loading cargo known as “passengers.” But with oil entering a bear market (a 20% correction from its peak), will we see some of those fees rolled back?
Ok, stop laughing.
Believe it or not, in the past, airlines actually have lowered fuel surcharges when the cost of oil has dropped. But those are fuel surcharges. Not the ticket-change fees, baggage fees, or pillow-and-blanket fees.
Yes, airlines have been posting losses for longer than oil was at its peak, so they’ve got some catching up to do with fees, in order to balance the books. And yes, lower fares plus higher fees will suck more people in to buying their product, unwittingly paying more than they shelled out at first. So, from the airline’s perspective, fees are a way to maintain demand and shore up the balance sheet. I get it. But the airline PR logic of “high fuel = more fees” is, on its own, dishonest.
If airlines had simply increased fares or added fuel surcharges, they could have rolled them back readily when prices dropped. But that was clearly never the intention. These fees are pure opportunism, using fuel as an excuse.
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August 12th, 2008 at 10:33 am |
I think the fees will be here to stay as the airlines profitability was negligible before fuel prices skyrocketed, the public has seemingly accepted the new fees and the airlines now have the confidence that they can apply the new fees with little loss in passengers.
However, they may have trouble with their logic in applying new fees in the future.
August 19th, 2008 at 10:07 pm |
[…] saying this represents customer preference and expands choice. Could someone remind them that oil is off its highs? Alrighty […]
August 20th, 2008 at 9:58 am |
Great information!
http://www.CompareAirlineFees.com is a great site to compare 25 different extra airline fees and flight prices from top sites at the same time.
August 26th, 2008 at 8:36 am |
I just returned from a brief trip to the UK via British Airlines and recalled that I paid over $100 each way in fuel surcharges; of course, in the meantime fuel costs have dropped considerably. So I was wondering about how to challenge them on the issue but the BA Web site offers no opportunity for customer feedback. I should note, on the optimistic side, that as a frequent BA user I’m part of a successful class action law suit which they lost and I expect to get at least some money back for past fuel surcharges.
September 22nd, 2008 at 8:39 am |
Up here in Canada, our flag carrier, Air Canada announced last week that in light of lower oil prices they are retracting their fee for a second bag (1st was always free). Other carriers up here have rolled back fuel surcharges.