FlyerTalk Forums - View Single Post - Award Fuel Surcharges Masquerading As 'Taxes'.....Time For An 'Inside Flyer' Expose
Old Apr 2, 2008, 6:42 pm
  #6  
Randy Petersen
Founder of FlyerTalk
 
Join Date: May 1998
Location: Colorado Springs, CO
Posts: 6,540
Thanks beaubo:
A few things for more information. The thing about having a bully pulpit is to use that pulpit in a manner which when making a point or a an issue of an issue actually commands respect on the quality of the POV. With that in mind, let's gather some information because there's something you say here that just doesn't ring very valid to me.

In this statement, "I'm starting to get the distinct impression that tactics like the fuel surcharges are just another subtle strategy to erode the value proposition of mileage redemption tickets." I'm interpreting that you think this fuel surcharge is a scam and that it is has an intent to erode the value.

Here's where i get a little stuck in this approach. FedEx doesn't have an awards program for me but yet i am still applied roughly a 15% fuel surcharge for each invoice. That's 15% on each invoice. Airlines have a fuel surcharge much lower than a flat 15%.

Now, somehow, given that other industries other than frequent flyer programs that are involved in transportation. For instance, I ordered something the other day online from a plumbing company. Yes, they added a 3% "transportation fuel surcharge." This is a plumbing company.

The point being here, and not an argumentive one, is that I'm losing your point that the fuel surcharge is there as a strategy for the airlines to erode the value of the tickets.

These patchwork of fees have long been part of the landscape, since the early days of PFCs and then the sneaky fee to pay for our own miles from car rental companies. Do I like it? Certainly not.

But where I'm getting stuck is that major media and "talky" types say that no one can ever redeem their miles. If no one can ever redeem their miles, then where is the problem of taxes and surcharges. And don't get me started on the "federal excise tax" on miles. Our enemy may not just be the airlines, but banks, plumber stores, FedEx and Hertz. The reality is that airlines gave away more than 22 million (earned) free tickets last year. Use any portion of math you want to apply and that is some boatload of money. Even with it being applied airlines just can't seem to be very good businesses, except for Southwest Airlines. So, as we prepare for any bully pulpit, if you're going to raise a ruckus, raise a remedy as well.

What is the solution? you yourself say that we do owe it to ourselves to keep them in business and we didn't do a good enough job at Aloha airlines, which I feel terrible about.

With the movement toward paying with miles, i suppose we could propose that all airlines allow members to pay for any and all of their fees by using miles. Actually several airlines already to that internationally. This way we would not have to part with wallets.

The chicken and the egg is a very tricky path here. So, can we have more input?

But beaubo, i just can't buy the argument that it is a strategy to erode the value of frequent flyer awards, sorry, that one is just too far out there in the X files.

Originally Posted by beaubo
Good Morning Randy-

I am perplexed about the ability and reasonableness of European and Canadian airline programs to include fuel surcharges in their 'tax' calculations for award tickets. And I am obviously equally concerned that our US-based lemmings, I mean programs, are poised to join their European brethren in adding the fuel surcharge to award tickets.

I am fully aware of the verbiage of all the programs that essentially gives them the RIGHT to make such carte blanche decisions. I suppose my issue is whether it merits having some kind of article in "Inside Flyer' that at least analyzes this issue, if not actually championing its repeal.

I am sympathetic with the plight of the airlines and understand that when purchasing airline tickets, one needs to brace for these fuel surcharges. And, obviously, we all want the airlines to survive, if not thrive...so that the programs and our miles stay intact. But, I'm starting to get the distinct impression that tactics like the fuel surcharges are just another subtle strategy to erode the value proposition of mileage redemption tickets.

I am hopeful that 'InsideFlyer' will choose to take the initiative to 'look under the hood' at the airlines' methodology on award ticket fuel surcharges.

With fuel surcharges on long haul travel exceeding $250 and top of the myriad patchwork of taxes, a $600 cost for an award ticket is a startling and unwelcome reality.

You have the bully pulpit.....will you chooose to use it?

Thanks!
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