Originally Posted by
mikey1003
I know it is several days late, but just got the email. FWIIW, I believe that once instituted, it will never go away.
Delta imposes fuel surcharge for award tickets
Posted June 27, 2008 at 1:37 pm ET by Tim Winship
"Quite the contrary. Whereas the recently imposed fees for checked bags and soft drinks and so on are effectively eternal—in other words, they will almost certainly persist even after fuel prices subside—the Delta surcharge really is keyed to the airline's fuel costs.
And if Delta is true to its word, and to the spirit of a surcharge linked to a specific variable cost, consumers can expect that the fees will be reduced or eliminated if fuel prices ease.
As Jeff Robertson, managing director of SkyMiles, explained in an email, "It's intended to be temporary, intended to directly offset exactly what we are charging extra for (fuel cost increases), and we do really hope that fuel subsides and it goes away."
The problem, of course, is that there is no definition of when "fuel has subsided" so the charge can go away. Further, as airlines "unbundle" charges to us, it's much easier on a competitive basis for this to stay.
Assuming that many award seats are seats that would otherwise go unfilled, the bulk of the fuel cost is a fixed expense for flying that plane and there is only a small, incremental increase for the additional passenger. The airline gets to reduce liability of unused miles in exchange for giving up the unsold seat. If the fuel surcharges are too high, no one would redeem, and the unused mileage remains on the books.... meaning that an airline would look for other ways to reduce the liability (e.g. shorter expirations, rolling expirations, higher redemption pricing for awards, etc).
So there is good reason to keep the fuel surcharge at zero or very low. If the airlines are successful at unbundling everything, I can see us getting a price for the base service, a charge for the fuel price, a charge for accomodations (F or C), food charges, credit card charges, seating and reservations charges, etc. etc. Yeah, it's close to that now, but there is no reason an airline can't say "we're charging you 100% of the price of fuel to carry your sorry butt from point A to point B" in addition to base fares for aircraft, maintenance, crew, ATC, etc. etc.