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Airfare Analyst: Delta Plots A Fuel Surcharge Comeback

By Jay Boehmer / April 20, 2010 / Contact Reporter
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Following a year-and-a-half absence from legacy carrier airfares, Delta Air Lines on Monday this week filed a $20 roundtrip fuel surcharge on "tens of thousands of mostly smaller citypairs," according to airfare analysis firm FareCompare, which noted that other majors as of last night had yet to match the move.

"U.S. travelers haven't seen domestic airline ticket fuel charges since November of 2008, when legacy airlines folded these surcharges into the base airfare as the price of oil dropped dramatically from early summer highs," FareCompare CEO Rick Seaney said in a note published on Tuesday. Noting that current oil prices are topping $80 per barrel, "surcharges are beginning to make a comeback," he said.

Delta's surcharge is not being levied on fares for major nonstop routes that touch the carrier's hubs, but instead the carrier is "placing most of the hike on smaller markets and larger non-hub cities," FareCompare's analysis shows.

Fuel surcharges grew dramatically in 2008 as carriers tried to cope with $100-plus-per-barrel oil, but such fees were not covered by corporate discounts and had little connection to the actual cost of oil, drawing the ire of corporate travel buyers who viewed them as de facto fare hikes (BTNonline, Oct. 6, 2008).

"Airlines have been struggling to get even the smallest system wide domestic airfare hike to stick this year," Seaney said in a note. "Several attempts have failed in the last few months. In lieu of significant base airfare hikes, airlines have resorted to fewer sales, peak travel day surcharges, a bevy of non-ticket fees and the release of fewer of the cheapest seats, all in order to increase revenue."
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