[cathyluk]

In July 2008, I bought 2 airline tickets to New Zealand/Australia from Air Pacific with departure and return dates in Mar 2009. Air Pacific charged $208 per ticket for fuel surcharge (code YQ listed on ticket). The fuel surcharge made sense at the time of my purchase since a barrel of crude oil was over $100 last summer. Earlier this week, I contacted Air Pacific to make inquiry about their fuel surcharge refund policy. I was told that there is no refund procedure at this time. Furthermore, my travel agent has indicated that Air Pacific still continues to include fuel surcharge fees when new airline tickets are issused.

[airhead]

Airlines don't purchase jet fuel the same we buy unleaded gasoline at the pump for our automobiles. They fuel hedge. When you purchased the ticket back in the summer of 2008, the airline makes an educated guess to what the fuel price will be when you depart and return in 2009. Other investors and bankers place money to back that hedge.

Although, I think it would be fair (too bad life is not fair) to issue a partial refund AFTER the journey IF the price of fuel was less than the estimated cost. But others may argue that would give the airlines a right to CHARGE EXTRA during the day of departure if the cost is more.

Still, I think the term "fuel surcharge" is stupid. The airlines should just include that cost with the fare. I hate it when my $9.00 home phone bill turns into a $24 bill after taxes, municipal fees, and yes, a CUSTOMER SERVICE FEE.

[countrynewsman]

When I go online to book a flight, I note the price and think to myself, "OK..how much is it REALLY". If memory serves me, I believe Southwest was one airline that hedged and came out pretty good. I get these offers in the email about special fares and then discover all the add-ons. However, the airlines are not alone in this. Try buying any item or service and see what it really costs. Look at that low price on a new car and find out that the dashboard and steering wheel are extra. LOL!

[cathyluk]

Airhead, thank you for your explanation about the fuel hedge used by the airlines. Are you implying that I have no hope getting that refund? Why do the cruiselines operate differently? the majority of cruiselines have stopped imposing a fuel surcharge when passengers book their cruises. They have also agreed to refund the customers during the quarter of their sailings if a barrel of crude oil is less than $60/gallon during that time.

Originally Posted by airhead

Airlines don't purchase jet fuel the same we buy unleaded gasoline at the pump for our automobiles. They fuel hedge. When you purchased the ticket back in the summer of 2008, the airline makes an educated guess to what the fuel price will be when you depart and return in 2009. Other investors and bankers place money to back that hedge.

Although, I think it would be fair (too bad life is not fair) to issue a partial refund AFTER the journey IF the price of fuel was less than the estimated cost. But others may argue that would give the airlines a right to CHARGE EXTRA during the day of departure if the cost is more.

Still, I think the term "fuel surcharge" is stupid. The airlines should just include that cost with the fare. I hate it when my $9.00 home phone bill turns into a $24 bill after taxes, municipal fees, and yes, a CUSTOMER SERVICE FEE.

[airhead]

Cathy: you have asked some very good questions and although I do not work for Air Pacific or a cruise line I have done some research to find those answers. Here is what I came up with:

It seems 2 cruise companies are offering the refund you mentioned. The other is a $70 /barrel cost. But in order for the customer to receive the refund, the AVERAGE cost of that barrel has to be under said cost for 25 days in a row for a disclosed amount of time. It seems to me in the wording, the cruise lines has made it complicated for the customer to calculate. Which in my opinion is no different than airlines in respect to fares and the eligibility of refunds.

Also, if I am not mistaken, cruises were adding on the "fuel surcharges" AFTER the booking and payment for each passenger multiplied by the number of days. From what I saw, it was about $4-9/day per passenger. I am not sure if other airlines are adding the charge after the booking. I can't speak for other airlines but I know AA does not do this.

I read the contract of carriage for Air Pacific and it seems through my translation (remember I am no lawyer) that a passenger who purchased a non refundable, is eligible for a refund (for the entire ticket) if the carrier fails to depart in a reasonable amount of time or cancels. Those who purchased other types of tickets may receive refunds as long as they adhere to certain times. Nothing is mentioned about the partial refund on a fee but rather "refunded tickets may be subject to fees." You may want to ask a professional travel agent or a lawyer for further comprehension of this contract. Perhaps their is a loop hole I missed.

I don't want to take away any hope but it seems unlikely a refund for the fuel surcharge can happen. But I can very well be wrong. I strongly encourage you to write a friendly letter to their headquarters and tell them why you deserve the refund. To better your chances, send a copy of the price of fuel of the given dates of your journey. Write to your local congressman also and encourage others to do the same. It seems the only way a difference is made is in large numbers. Good luck to you.

[skippy]

Originally Posted by cathyluk

In July 2008, I bought 2 airline tickets to New Zealand/Australia from Air Pacific with departure and return dates in Mar 2009. Air Pacific charged $208 per ticket for fuel surcharge (code YQ listed on ticket). The fuel surcharge made sense at the time of my purchase since a barrel of crude oil was over $100 last summer. Earlier this week, I contacted Air Pacific to make inquiry about their fuel surcharge refund policy. I was told that there is no refund procedure at this time. Furthermore, my travel agent has indicated that Air Pacific still continues to include fuel surcharge fees when new airline tickets are issused.

Cathyluk, I had same problem with British Airways. I bought tickets to Australia in Aug '08 for travel in Feb '09. They have just cut their fuel tax surcharges from 17th Dec 2008. Do I get a refund ? No way jose. If you paid in advance they will not reimburse you. Since oil is almost $100 a barrel less now when I booked I thought it would be only fair to be treated the same as those travelling after 17th Dec. This appears to be just another way for B.A to put their hands in your pocket in a very cynical way.

[jimworcs]

In reality, no airline could operate without fuel, so it is a basic cost of doing business. When oil prices are high, they should put their fares up and when they are lower they should put their fares down. This fuel surcharge business is a scam and an excuse to advertise fares that are not really available. Sooner or later these robber barons will have to be regulated and stopped from their outrageous behaviour,but it will take a lot of political lobbying to make a difference.

[ChrisH]

Many businesses, not just the airlines, charge a fuel surcharge, if fuel is a part of operating their business. I don't think it is meant to be deceptive. Fuel is one of the biggest costs for the airlines. There is entirely too much competition, right now, in the airline industry, and as a result, it isn't quite as simple as just raise fares. Airlines have tried this, and if they all do not do it, it doesn't work. People flock to the airline with the cheaper fare, even if only a few dollars cheaper. They have to remain competitve with each other, and with airlines like SWA, etc., out there, they have to keep fares low in certain markets, in order to compete.

What I disagree with, is the fuel surcharge, plus fees for bags, fees for just about everything else, and the raising of the cost of these other fees (change fees, ticketing fees, etc). I think a simple fuel surcharge fee, in addition to the ticket, that recoupes the cost of fuel, and that goes up, or down, based on the cost of fuel, would suffice, and I doubt too many passengers would complain about it. The airlines, like any other business, are going to pass their costs along to the customer, that is the point, I just think the airlines could go about it a little different. I don't disagree with a fuel surcharge, but do think, when purchasing a ticket, the surcharges should be plainly spelled out to the customer.

[skippy]

thanks Cathy, Chris & Jim. Firstly when I complained to B.A that I would not be receiving a rebate they replied "Any B.A booking has a fuel surcharge applied, which is applicable to that date. The fuel surcharge is not relevent to the date of travel. If you wish to complain contact your travel agent" When I booked the flight oil was almost $150 a barrel and obviously I accepted the surcharge. Now regarding this hedging of fuel (which I presume must be similar to the commodities market) either those who handle this matter for B.A are incompetent or they manipulate the market in their own interests. That is deceiving their passengers. Even though B.A's Chief Executive Willie Walsh said " we absolutely condem any anti-competitive activity by anybody (Oh didn't I mention that this was just prior to British Airways being found GUILTY and fined for price fixing on fuel surcharges and this was just this year. So we know they are thieves, are they still at it. Certainly looks like it . And by the way don't complain to them. Complain to your travel agent. Is this a cop out or what.

[jimworcs]

Chris, I don't really understand your logic. If as you say, airlines have tried raising their fares and if they don't all do it, it doesn't work.. how is this helped by an airline raising it's fuel surcharge if they don't all do it. The truth is, most pricing by airlines these days are dynamic and rise and fall according to a number of highly complex factors, including costs, demand, competitive issues, etc... so I can't see how the surcharge is anything other than an attempt by the airline to post a "fake" price, to which the surcharge is added. Can you imagine the chaos if all businesses adopted the ridiculous pricing structure of the airlines. As you shop in the supermarket, you get to the checkout with your six muffins for a $1 offer. At the check out the sales clerk advises you that there is a $1 fuel surcharge, a 50 cent "security" charge to ensure the muffins are safe and 25 cent charge for using your card to pay for it. That will be $2.75 please. It is ridiculous and makes no sense. Supermarkets have to pay huge haulage fees and when the price of gas goes up it goes up for them too. The also face huge competition and their competitors don't always raise their prices at the same time. That is the free market, and I cannot understand why the airlines feel that they are not subject to it. Can you tell me how many supermarket chains have gone into chapter 11 repeatedly, and then emerged unscathed having unloaded tons of debt?

[ChrisH]

Jim,

That is exactly why I said that the airlines should go about it different, and spell out to the customer what surcharges will be charged. They don't do this. I agree that it is an attempt to post a fare, and hide the surcharge, until the last second, when most people have already hit "purchase". With that said, I don't disagree with charging a fuel surcharge, just the way it is done.


I recently read an article that described a lawsuite against Wal-Mart, in which it has been stated that prices often ring up higher, at the register, than is posted on shelf. I still stand by my claim that many companies practice some deceptiveness, it just isn't always so obvious, and doesn't effect people's lives, in most cases, to the extent that the airlines can.



Air fare is very complex, and it isn't as simply as raising fares. A per fuel surcharges. When the airlines first started with fuel surcharges, all of the airlines charged, but Continental. Because Continental didn't, the others stopped, until, over the summer, when fuel was at it's highest. What one airline does, the others follow, and if one chooses not to follow, usually the others back down, soon after.

Originally Posted by jimworcs

Chris, I don't really understand your logic. If as you say, airlines have tried raising their fares and if they don't all do it, it doesn't work.. how is this helped by an airline raising it's fuel surcharge if they don't all do it. The truth is, most pricing by airlines these days are dynamic and rise and fall according to a number of highly complex factors, including costs, demand, competitive issues, etc... so I can't see how the surcharge is anything other than an attempt by the airline to post a "fake" price, to which the surcharge is added. Can you imagine the chaos if all businesses adopted the ridiculous pricing structure of the airlines. As you shop in the supermarket, you get to the checkout with your six muffins for a $1 offer. At the check out the sales clerk advises you that there is a $1 fuel surcharge, a 50 cent "security" charge to ensure the muffins are safe and 25 cent charge for using your card to pay for it. That will be $2.75 please. It is ridiculous and makes no sense. Supermarkets have to pay huge haulage fees and when the price of gas goes up it goes up for them too. The also face huge competition and their competitors don't always raise their prices at the same time. That is the free market, and I cannot understand why the airlines feel that they are not subject to it. Can you tell me how many supermarket chains have gone into chapter 11 repeatedly, and then emerged unscathed having unloaded tons of debt?

[wkharris2001]

Originally Posted by ChrisH

Jim,

That is exactly why I said that the airlines should go about it different, and spell out to the customer what surcharges will be charged. They don't do this. I agree that it is an attempt to post a fare, and hide the surcharge, until the last second, when most people have already hit "purchase". With that said, I don't disagree with charging a fuel surcharge, just the way it is done.

Actually the DOT requires that the fuel surcharge be disclosed at first point of contact, meaning, it's included in the fare, the only taxes and fees that are not added into the airlines base fare domestically are your september 11th security fee,2.50 per segment up to 4 segments (this goes to the tsa) your segment tax which is usually 4.50 per segment your'e flying,(this goes again to the us government) your passenger facility charges again usually 4.50 per segment up to 4 segments,(this goes to the airports you depart from) and your 7.5% U.S. excise tax. (the airlines don't get any of this money they are the taxes you have to pay to your government) so when you really think about it, the airlines aren't "hiding" the fuel surcharge they're adding it into the base fare. so call it a surcharge call it a fare increase, it all ends up being the same thing in the end.