Airlines love lower fuel prices, but ...

What's The Deal

October 26, 2008|By MICHELLE DEAL-ZIMMERMAN | MICHELLE DEAL-ZIMMERMAN,michelle.deal@baltsun.com

The good news: Gas prices are down just about everywhere. AAA, the auto club, says the national average is now less than $3 a gallon. The bad news: the lower prices likely won't last, because the OPEC countries are planning to cut back on production.

For a moment, I was hoping that airlines would reduce fuel surcharges for trips to Europe and maybe even slash some add-on fees that were supposed to pay for higher fuel costs. The airlines are surely benefiting from the recent lower fuel costs; why shouldn't passengers?

Some fliers are, according to Tom Parsons, editor at BestFares.com. He says that airlines have dropped fuel surcharges about 18 percent on flights to London and other international destinations from many U.S. cities. The exception: major East Coast cities like ours, where charges remain the same. Another trend, according to Parsons, is for the airlines to incorporate the fuel surcharge into the base fare. Air Canada did that in September - and eliminated its $25 fee for a second checked bag at the same time.

The New York Times reported last week that Sen. Robert Menendez, Democrat of New Jersey, wrote to the CEOs of major airlines, asking when their fees would reflect the changes in jet fuel prices, which are down more than 40 percent since July.

Airline executives counter that fuel prices were high for a while before they implemented the new fees, so they have several months of losses to make up. Basically, I think the airlines like what the fees do for their bottom line and, as passengers have become accustomed to paying the charges, why change it? Plus, holiday travel season is coming up - lots of extra checked bags filled with presents. Ka-ching. And with OPEC on the case, who knows where fuel prices will be in a couple of months?

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