What the hell is that 'fuel surcharge'?
October 23rd 2008 06:35
Category: No Category
It has always been there, but since July this year it has attracted attention to itself as consumers are made more aware of this fuel surcharges that comes with travel services. Airlines were especially aggressive in increasing their fuel surcharge for every flight trip we take, and some have since increased their surcharge by more than 50% than pre-July times.
This fuel surcharge is often incorporated into the taxes we all have to pay, and hence increasing the tax component of the air ticket you buy. Thai Airways for example, has a tax component of $1200 for a return journey to London from Sydney, which means, even if you see a special for $1300 airfare, once you add in the taxes you are still paying $2500. Etc.
We all know it was because the cost of crude was high and hence have felt that perhaps they have the right to do so. However, have you noticed that every airline, for the same flight routes, have different taxes? And some with a difference of as much as $800 and you wonder why?
Beside the usual explanation that airlines get charged a different rate when they land and take off from different airlines, based on the airline and the airport's agreement contract. It's always cheaper for an airline to land and refuel at their own country's airports and there fore you'll find that long haul flights always have a stop over component from the airline's country of origin. But with this fuel surcharge thing, it's gone out of hand. The airlines are putting that on top of their taxes, in the hope that consumers are going to take it for granted that is the cost of fuel. It does not make sense that those flying with Thai will have different fuel component to China Airlines whose tax component for a return trip to London is still under $500.
Qantas is a good example of fuel surcharge bullying, by increasing it by 40%, and then happily announcing that they've made a 40% profit in the last financial year. A bit suss really.
Not just the airlines too. Cruising companies, bus companies are also putting on a fuel surcharge component - Greyhound buses that runs up and down the coast put a 9% on the total cost of ticket on top of the ticket cost as fuel surcharge...
Now that the fuel cost has come down, hardly many airlines are decreasing their fuel surcharge either. A bit unfair to the consumers isn't it?
This fuel surcharge is often incorporated into the taxes we all have to pay, and hence increasing the tax component of the air ticket you buy. Thai Airways for example, has a tax component of $1200 for a return journey to London from Sydney, which means, even if you see a special for $1300 airfare, once you add in the taxes you are still paying $2500. Etc.
We all know it was because the cost of crude was high and hence have felt that perhaps they have the right to do so. However, have you noticed that every airline, for the same flight routes, have different taxes? And some with a difference of as much as $800 and you wonder why?
Beside the usual explanation that airlines get charged a different rate when they land and take off from different airlines, based on the airline and the airport's agreement contract. It's always cheaper for an airline to land and refuel at their own country's airports and there fore you'll find that long haul flights always have a stop over component from the airline's country of origin. But with this fuel surcharge thing, it's gone out of hand. The airlines are putting that on top of their taxes, in the hope that consumers are going to take it for granted that is the cost of fuel. It does not make sense that those flying with Thai will have different fuel component to China Airlines whose tax component for a return trip to London is still under $500.
Qantas is a good example of fuel surcharge bullying, by increasing it by 40%, and then happily announcing that they've made a 40% profit in the last financial year. A bit suss really.
Not just the airlines too. Cruising companies, bus companies are also putting on a fuel surcharge component - Greyhound buses that runs up and down the coast put a 9% on the total cost of ticket on top of the ticket cost as fuel surcharge...
Now that the fuel cost has come down, hardly many airlines are decreasing their fuel surcharge either. A bit unfair to the consumers isn't it?
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Comment by Sara Dobson
My Turn
I have always wondered what the rules are for airlines in terms of advertising fares. I remember around 10 years ago when you would see an advertised fare $1300 to London and think "Wohoo its worth flying Korean air and spending 24 hours in seoul in negative 20 degree temperatures for that price" Only to find that once tax is added there is not that much differnce in price from flying AirNZ with better food and wine on offer and TV screens in the back of your seats.
I think that the rules have change now in terms of including tax in the advertised price, do they also have to include fuel surcharges or can they just make them up?
Comment by AmyHuang
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Although, sometimes they do choose to advertise without tax because it's more attractive, but that's only in very special circumstances. And trust me the next time you see a JAL airfare to London for $1300, ask me the tax, the last time I checked they were $1930 TAXES ALONE.