Questions asked about airline passenger fuel surcharges

Passengers seem to be paying the airlines fuel bill in surcharges alone

November 2008

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Earlier this year most major airlines added fuel surcharges and for long haul flights of less than 9 hours BA has been charging between £78 - £98.

This can earn the airline £19,000 from surcharges on a 224 seat Boeing 777 flight to New York. Virgin Atlantic also charge similar surcharges to their customers. Yet Boeing show that a 777 plane with in fact 80 more seats would require 44 tons of fuel to get to New York. At today’s rates $800 a ton this would cost just over £20,000. This almost entirely covered by the fuel surcharges.

BA and Virgin have now reduced their surcharges but by only £10 meaning that they still receive over £17,000. When BA were questioned over these figures they said that most of their fuel was paid in advance and so these lower fuel costs have had no impact on their own costs. Also that the true cost when taking account of any diversions and extra taxiing required means that the actual cost to them is about £31,000.

But even when looking at their own figures this relates to surcharges covering 60% of the fuel cost. BA maintains that its fuel bill this year has risen by £1 billion up to £3 billion with fuel accounting for a third of their total costs.

It is hoped now however that fuel prices will continue to fall in fact Merrill Lynch predict the price per barrel to fall as low as $50 next year so the fuel surcharges may shortly become a thing of the past.

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