Originally Posted by JerryFF

OK - some excellent points made. The issue of whether a fare raise is called a fuel surcharge or incorporated into the fare seems irrelevant to the main issue. Bottom line is the cost to the consumer.

I remember Economics 101, the MPC equation - marginal propensity to consume. If you raise cost, fewer consumers buy. If you lower cost, more consumers buy. But there is a parameter called elasticity - related to the slope of the curve. As was pointed out above, airlines want to maximize revenue. How elastic is the fare curve? Sometimes you make more money by raising the cost because the increased revenue per widget (i.e. airline seat) more than makes up for the lost number of widgets sold. But sometimes it's the other way around - increase cost per widget is not enough to make up fordecrease in the number of widgets sold. It's all in the elasticity, or shape of the curve, which is very difficult to calculate in some cases.