Lots of misconceptions here about the complex world of interline ticketing and the history of fuel surcharges.
To understand the reason behind fuel surcharges one must first understand the way airlines publish their fares. For better or for worse, almost all legacy airlines file their fares via a company called the Airline Tariff Publishing Company "ATPCO" (
www.atpco.net). ATPCO then handles the job of maintaining the fares database and distribution of these fares in bulk to each GDS system subscriber. ATPCO is owned by a group of about 20 airlines from around the world but is run entirely independently.
Large legacy airlines have hundreds of thousands of fares published at any given time. Each fare basis for each city pair is a unique record in the ATPCO database and there is a charge levied every time each record is changed. This charge is quite small (a few cents) but when multiplied by the number of records maintained can easily reach 6 or even 7 figures in value for the entire database.
When global fuel prices (which usually represent between 20-40% of an airline's costs) became highly volatile, there was a need for airlines to monitor, review and update their systemwide fares on a far more regular basis than previously. However, the cost of changing fares (either up or down) across the entire system was prohibitive. For an airline the size of British Airways to enforce a 5% fare hike due to higher fuel prices would cost over a million dollars simply to process.
The fuel surcharge was the solution to this problem. By simply mandating an additional charge to be collected as a tax on all fares, the database maintained a single record for "YQ" which was then updated by each airline. So instead of raising all fares by $5, one simply raised the "YQ" by $5 and paid only one database change fee.
There are local regulations in various parts of the world (notably the USA but many other countries too) that regulate how the YQ may be published or collected but at the end of the day there are similar cost-effective solutions (the built-in "Q" surcharge used by US carriers for example) that ATPCO offers that cater to most major markets.
Will continue later with the reasons why fuel surcharge had to be considered a non-interlineable charge and why the new IATA carrier determination logic resolution (resolution 852) will put an end to the traditional third party issuance "fuel dump" after October 2009.