Fuel surcharges? What are they using them for?

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What’s it for? Airline fuel surcharges are mounting. With fuel at about $150 or so barrel, fuel surcharges are approaching $100 a flight on some routes. And one group that questions them are corporate travel departments. Take, for instance, attendees at the Association of Corporate Travel Executives meeting in Washington this week. John Caldwell, who advises travel firms from Washington, asked “how do we audit it?” Duane Futch, who manages travel for a little company called Wal-Mart, raised a number of questions, including, “how do we know that they’ll use it for fuel?” and with ancillary fees such as charges for window seat and the like, “how do we know it’s for that?”

The answer, Duane, clearly is, you don’t. The airlines could be taking the money and buying strawberry licorice with it. It is, however, slightly more likely that with fuel constituting about 60% of the airlines’ operating costs, they are perhaps going to be spending it on gas. And airlines are imposing fees because they need the revenues, not because suddenly it costs more to choose a seat. Granted, the exact fee does not necessarily have to have a direct linkage to the service, eg, how much does it cost to answer the phone? But the real issue is one of proportionality. If $15 to carry a checked bag does not seem extortionate… This raises a number of questions, including just where these folks have been for the past few months.   

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