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A Major Airline Drops the Hated Fuel Surcharge! So Why Won't the Rest of the Industry Follow?

One of the greatest lies foisted upon the American public—right up there with "this won't hurt a bit" and "New Coke will be better"—was crammed down travelers' throats a half decade ago. Fuel prices were rising. The airlines put out a tear-jerking sob story in the press, appealing to our better natures to help them survive. They told us that to stay alive, they had to start tacking extra charges onto ticket prices. Because of fuel charges, they also had to start charging us for baggage. Don't blame us, they said! It's those pesky gas prices. Consumers, feeling pity, sat back and let it happen.

Well, gas prices halved since October. A gallon of gas now costs less than a subway ride in New York City. But the airlines refuse to remove the fuel surcharges. Why would they? They're rolling in cash. Baggage fees now bring in $1 billion per quarter for the industry. Delta has announced that it thinks it will save $1.7 billion in the coming year simply because of the drop in fuel prices—that's without changing a thing about how it operates—so on top of those cash savings, its stock price is soaring. Investors, who never cared much about consumers so long as they're over a barrel, are positively delighted that the airlines keep extracting extra money from passengers.

But one airline is bucking the greed trend. Virgin Australia is eliminating its fuel surcharges on its flights to the United States and while it's at it, it's trimming airfare by $50.

Granted, Australia is just one corner of the world (and Virgin's sister airlines in America and Europe are not yet following suit), but Qantas and Emirates, Virgin Australia's major competition in the area, are now being shamed in the press for retaining their fees there. As well they should be. In an industry notorious for operating in suspicious concert, Virgin Australia has broken ranks and proved it can be done.

Virgin proves an airline can indeed shed fuel surcharges and—gasp—build the cost of fuel into the actual fare. Calculating the base airfare to cover the expenses of operating a flight is not exactly a novel concept, but airlines don't want to step out alone because it would make their prices look higher than their competition. Airlines seemed to have no trouble building fuel costs into airfares for many decades, but higher gas rates made it expedient to uncouple the cost as a fee and pretend their prices were lower than they actually were.

Virgin Australia—now joined by Japan Air Lines and Qatar Airways—has proved that the airlines' sob song is officially out of tune. With their original justification now removed, the airline industry's manipulation of the public's sympathy has proved to be based in less noble motives. 

At the bookstore, you're not forced to pay a few extra dollars above the price of a book if the price of paper goes up—publishers just raise the cover price of the book. But the airlines (and cruise lines, and other industries in the travel realm) requested, and received, special pity from the American public to enact its disingenuous pricing schemes. That sympathy is now being abused.

In fact, Sen. Charles Schumer has called on the Transportation and Justice departments investigate why lower fuel costs are not being passed to consumers. Good for him: The airways are a manifestation of the American right to travel, and the more inaccessible they are made through unfair prices, the more American liberties are curtailed. But you know how Washington is, you know how intractable Big Business can be, and you already know that those calls for a probe have gone nowhere.

Airlines should no longer be permitted to hide the true cost of taking their flights by employing a shell game of mandatory added fees. We will never be rid of baggage fees because luggage can be considered optional—but obligatory fuel fees can and should now be considered a thing of the past and an embarrassing chapter for the airline industry.


Jason Cochran (@JasCochran) is Editor of

Photo credit: Guano/Flickr