United Kingdom

Airline surcharges. The future?

Fuel surcharges, seat preferences, bag checking... the list is endless. Additional costs on top of your standard airline ticket have become the norm in recent years, but what does the future look like?

What’s it all about?

Airline surcharges are making it difficult for travel managers and bookers to compare fares on a like-for-like basis. Figures that tell the story...

• Back in 2004, the fuel surcharge was £2.50 per sector - introduced to help offset the rising cost of oil
• These days, fuel surcharges account for around 10% of a typical fare
• In 2011, those same BA charges reached £125 for flights under nine hours, and £145 on longer flights (business & first class)
• A barrel of jet fuel rocketed to $180 in 2008 before falling dramatically to around $50 in 2009. However, airline fuel surcharges did not reflect this
• Traditional airlines make around 2.9% of their revenues from ancillary charges, the figure is 5.4% for low-cost carriers due to additional fees from priority seating and baggage charges*
   

Our take on things

The problem for buyers is that fuel surcharges are rarely on the table when it comes to negotiating a route. Yet unlike true duties and taxes such as Air Passenger Duty, which are unavoidable, buyers argue that they should be included in the base fare. 

“We believe fuel surcharges should be included in fares. Fuel is a constituent overhead of running an airline, just as labour costs are.”

To try and control  further potential surcharge increases, it is recommend that travel buyers purchase tickets as early as possible:

“Prices only tend to go one way at the moment, particularly with fuel surcharges, and more and more airline ticketing is done instantly. If a booking is not ticketed immediately then prices almost inevitably go up.”

Nigel Turner,  director of programme management, CWT UK & Ireland

*Research by travel technology provider Amadeus, and consultancy firm IdeaWorks