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Jet Fuel Travel: Will Airlines Start Charging Extra for Gas?

January 4, 2008 at 11:20 AM | 0 Comments

It now costs about $100 to buy a barrel of oil, and that has some airline analysts predicting that fuel surcharges might turn into fuel charges. Think of it this way: Instead of buying a flight, you're in effect renting the airplane seat. The fuel you need to get to your destination would be extra, just like when you rent a car.

Of course, airlines already hedge against price increases, buying up mass quantities of jet fuel at discount. Southwest, for example, is only paying about $50 a barrel for most of its gas. Continental does the same, but only gets a third of its fuel below market rate. United does it differently, adding flat surcharges on tickets to compensate for higher costs.

By removing the fuel charge from ticket prices, airlines would avoid the hassles of betting on petroleum futures. Of course, that'd make shopping for airfares much more difficult and put passengers--rather than airlines--at the mercy of the global energy market.

Mark Ashley at Upgrade: Travel Better doesn't like the sound of that:

This would be awful for consumers, whose ability to predict the actual cost of travel would be flushed down the toilet...The fuel bill on a 7,000-mile trip can change substantially with small shifts in the price of oil. "Low fares" would be a thing of the past, unless the airlines started "free fuel" promotions...

I wouldn't be surprised to see Skybus or Spirit try something like this, since they're already nickel-and-diming their customers and they're known for doing anything to make a buck.

Related Stories:
· US Flyers May Face Separate Fuel Fees [Reuters]
· Will Airlines Start Unbundling Fuel? [Upgrade: Travel Better]
· Maxjet Plays the Scrooge [Jaunted]
· Airlines coverage [Jaunted]

[Photo: Mark Bodenham]