Fuel surcharges rolling back

Finally some good news in the world of fees and surcharges!  Most major international airlines are cutting them now that fuel costs are dropping back to early 2007 levels.

Recently bmi announced that they were removing fuel surcharges from flights to/from Heathrow, and then they expanded that plan to remove the surcharges on all their regional flights in Europe.  The other British carriers have also announced major cuts, with British Airways and Virgin Atlantic both trimming their fees.  The amount varies depending on the cabin and trip length, but every little bit helps.  Then again, the surcharges don’t seem to be changing for the premium cabins, so maybe it doesn’t help so much.

Most of the major Asian carriers are reducing as well, with ANA, JAL, Asiana and Korean all announcing cuts in the past week or so.  The cuts range from 30-70%, which is pretty impressive.  That being said, the ANA and JAL cuts are coming down from some ridiculously high levels and they are at the lower end of the range for the cut amounts, so those flights will still have a rather significant surcharge associated with them. 

Here’s the thing – we almost certainly won’t see lower fares because of this.  The surcharges will decrease but the carriers will almost certainly attempt to raise fares to match the decreases.  So why does it matter?  In a word, rewards.  Reward tickets are subject to “taxes and fees” so they pay for fuel surcharges in most cases.  This can render a reward ticket virtually useless for many trips.  As the surcharges are traded out and fares raised to compensate folks buying tickets will pay the same price but folks redeeming for a reward trip will see their costs reduced significantly.  That’s a great thing.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.