CZBB

For those loyal AC followers; here's this quarters numbers about the fuel surcharge gouge...

To London from Toronto, you pay 503% overtop of what AC pay, from YVR it's worse at 632%, and from Halifax, you actually pay more than the total fuel cost.



Operating expense per ASM ("CASM") (cents) 18.0 (*1)
CASM, excluding fuel expense (cents) 13.8 (*1)

... fuel expense per ASM 4.2



Distance YYZ-LHR-YYZ (miles) 7112 (*2)
Total fuel cost YYZ-LHR-YYZ $298.71
Fuel Surcharge on a YYZ-LHR-YYZ ticket $248.00
Air Canada's Portion of fuel cost $49.29
Fuel Surcharge 503%

Distance YVR-LHR-YVR 9446
Total fuel cost YVR-LHR-YVR $396.73
Fuel Surcharge on a YVR-LHR-YVR ticket $324.00
Air Canada's Portion of fuel cost $51.27
Fuel Surcharge 632%

Distance YHZ-LHR-YHZ 5714
Total fuel cost YHZ-LHR-YHZ $239.99
Fuel Surcharge on a YHZ-LHR-YHZ ticket $248.00
Air Canada's Portion of fuel cost (8.01)
Fuel Surcharge (cannot be calculated)





*1: http://micro.newswire.ca/release.cgi...&Start=0&htm=0
*2: http://www.gcmap.com/mapui?P=yyz-lhr-yyz

Sebring

I'll get you a better answer on Monday, but right now, your methodology errs in a couple of ways.

1. Great circle mapper routes do not take into account the actual routes flown, fuel burned on the ground taxiing, idling, during de-icing, making big detours to avoid volcanic dust, circling because of an ATC congestion problem or waiting for a thunderstorm to pass, etc.

2. To compare to a passenger surcharge, fuel cost has to be amortized over actual paying customers carried over the correct distance, not over total seats flown over an optimized distance.

Shareholder

Not to mention the reality that when I made my first transAt trip to the UK, I think I paid about $149 each way for an all-in cost of $298. Consider the Cost of Living and other factors, including the price of fuel and wages, and tell me if the fare you're complaining about today a/i is not pretty much the same? (Of course, the UK government did not soak us $60+ back then either.)

ylwae

I think I'd be happier not knowing how much the "fuel surcharge" actually is. It's a number large enough that I keep questioning it, wondering how much of it is actually related to the cost of fuel. Wish they (AC and others) would just roll everything up and give us a single price.

tcook052

Fuel surcharges have been around much longer than this recent volcanic eruption so the other factors outlined make much more sense to me that this very recent cited reason does.

ceaton

But then they'd lose the Aeroplan surcharge it's actually become as well as the ability to advertise disingenuously and to adjust fares without regulatory approval in some cases.

DanJ

Not sure what the benefit of calculating what portion the customer pays and what portion AC pays, since ultimately, the customer pays it all. The all-in fare is the all-in fare. Compare those numbers with other airlines and pay it or don't pay it.

mattm00se

..wait till you calculate the markup on preferred seats.

28isGreat

For me, the benefit of this calculation is to show the idiocy of calling it a "fuel" surcharge. Roll it into the base fare where it belongs, advertise the real price, and I'd be a happier customer. The cost of fuel is a (very!) essential part of the cost of flying, not some incidental fee.

cloudcuckooland

When you consider how much cheaper the "fuel surcharge" is to fly to Hong Kong or Shanghai as opposed to London or Paris, it becomes even more laughably absurd.

Flews

Between Westjet and Porter I have been able to "unsubsidize" much of this hidden AC ripoff this year...

Cheers,

threepoint

You are quite correct, and factoring in the above points (except for statistically-irrelevant volcanic detours - I mean, c'mon) will reduce the sensationally large percentages as quoted by the OP. However, the point made by the OP remains valid. AC paid the entire fuel costs for each flight prior to the sudden rise in oil prices a few years ago. About 18 months ago, I and a couple of AC pilots used real-world fuel burns (from actual flight plans) on a number of AC routes using a variety of aircraft types. I think we examined average fuel burn numbers on 6 domestic and 3 or 4 international routes (this was prior to the fuel surcharge being hidden on Canada/US flights). We assumed each plane was filled with the average load factor as announced by the company for that timeframe (somewhere in the 80-85% range if I recall). In each case, we concluded that the passengers are paying more than AC pays for fuel with the fuel surcharges alone, as well as continuing to pay the portion of the base fare which was previously devoted to covering the entire cost of fuel. We even assumed that AC paid the retail cost of jet fuel, which of course would not have been the case; AC purchases their fuel at significant discounts using bulk order & hedging strategies.
So taking all your valid points into consideration, AC and all the other airlines that charge a fuel premium are onto a good thing: the paying customer covers the cost of volatile oil spikes, continues to pay when oil prices retreat and pays surcharges that compensate the airline for more fuel than is actually used.

So let's be honest: it ain't a fuel surcharge at all - it's a way to increase revenue under the guise of hardship. Set the base fare to cover the costs of providing the service, and let the customer decide if the product warrants the price. The only add-ons to the base fare should be those fees - er, sorry - taxes charged by airport authorities & government agencies which are merely collected by the airline and passed on. (hmmm, do the airlines pay these fees on defined schedules - if so, it's likely they're making money on the interest gained before they pass them on to the various authorities).

cur

Wouldn't that suggest that high fuel taxes by Canadian/EU governments are a cause of these high rates?

cloudcuckooland

I had not considered the EU tax angle before. What I had heard before was that it was something that LH and other transatl carriers did, so it was the market . . . "Everyone else is doing it, so we are too" . . . but taxes levied by the EU would explain it better.

ylwae

But how can that be? We all know industry practices are fully transparent.