Price of oil falls so how about a flight surcharge refund
By Darren Cronian on Saturday, August 9th, 2008

You will have read in the media over the past few months that the price of fuel has increased to a level that airlines have had to increase fuel surcharges, which I suppose is understandable, even though it annoys us passengers.

Price of oil falls so how about a flight surcharge refund

Interesting though that the media haven’t picked up that the cost of a barrel of oil has dropped by 20% in the past month, yet we have not heard anything about the flight surcharges decreasing. Since the price of oil has reduced does this mean we’ll receive a refund on our flight tickets?

You bet we won’t..

Airlines are quick enough to introduce surcharges and it annoys me because everything has increased, from a loaf of bread to return bus ticket, yet when the price of oil decreases in price we won’t see a decrease in the price of products and services.

It stinks.

As usual I would love to hear your comments..


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15 responses to “Price of oil falls so how about a flight surcharge refund”

Reem Greiver | 10 August, 2008 at 9:27 am

Not only that, if you buy a ticket in advance (issue the ticket & pay) , even business class and you wish to change it before departure, the airline will charge you according to the new fuel charges, for some odd reason they never drop, even if fuel changes prices.
However, If you change your return date after departure this rule does not apply, why?!
Its all about how the airline can make more money.

Kely | 10 August, 2008 at 3:55 pm

That is an absolutely “not going to happen YET” comment. What makes you think a 20% drop in crude oil in a few weeks is going to lead to the “immediate lowering” of fuel costs for airlines?! I am no friend of the airlines, but you are not very understanding of market forces
and how they impact airlines and other users of fuel. I suggest you take a few up to date marketing courses and park your keyboard for a year or so!

Darren Cronian | 10 August, 2008 at 4:28 pm

@ Kely

Your are obviously entitled to your opinion, but what has a marketing course to do with the price of oil? Market forces I can nothing about, I am a consumer, and I don’t appreciate airlines conning me out of my hard earnt salary.

Maybe you should take 5 mins to read the about me page which tells you I am a travel blogger not an airline or travel industry expert and I blog about my thoughts and personal experiences of travel.

Dee | 10 August, 2008 at 10:48 pm

To be fair, it took a while for (at least some of) the airlines to put their fuel surcharges up.

Derek Moreno | 11 August, 2008 at 9:56 am

The airlines did have to react pretty quickly because the increase in gas prices came with little warning and no one knew just how high they might climb. But as Darren Mentioned, as the economy and the gas prices start to level out once again, how long will it take for the airline industry to level themselves out? But it seems as though things don’t always work the way we might think they should work, no matter how much sense it seems to make.
The airlines have been in some trouble for some time now. I cant see any of this getting better anytime soon.
Great Blog!

Nick | 11 August, 2008 at 11:41 am

Darren

Airlines buy fuel in advance, as the friendly people at Ryanair said if had not brought 3/4 of it year’s fuel in advance then it would have made a loss. Also it took about 3 months for the fuel charges to come in.

Yes airlines will reduce there fuel surcharges. Once fuel stays down for more than 3 months. Or if there is public pressure and they can afford it.

Darren Cronian | 11 August, 2008 at 4:08 pm

Thanks for your comments keep them coming.

@ Nick

Fair enough, but what’s the chances of oil staying at the same rate, or lowering in the next three months?

Stephen Budd | 12 August, 2008 at 11:25 am

“Fair enough, but what’s the chances of oil staying at the same rate, or lowering in the next three months?”

Well…that depends on supply side issues (can oil producers pump and refine quickly enough to satisfy global demand) alongside demand side issues (growing global demand for a finite resource) and any geopolitical and unexpected events that upset that equation (invading Iran, p*ssing off OPEC to a significant degree, US rigs getting trashed in a hurricane - that sort of thing). The bottleneck at the moment is the supply side.

Oil future prices (see http://www.nymex.com/lsco_fut_cso.aspx) suggest stability in the immediate future.

Darren Cronian | 13 August, 2008 at 12:37 am

@ Stephen

Thanks for the useful information. Will check that link for future price changes.

Rohan | 13 August, 2008 at 3:27 am

If I remember correctly BA were the first to increase the fuel surcharge so will they be the first to lower it. I would not bet my house on it.

Kelsey | 13 August, 2008 at 8:13 pm

This has nothing to do with fuel surcharges but I read your About Me page and you should go to California as well.

Darren Cronian | 13 August, 2008 at 10:09 pm

@ Rohan

I think you are correct on both counts. The airlines will take ages (if at all) before they reduce fuel surcharges. We’ll see though, maybe for once they will think about passengers a little bit more.

@ Kelsey

There’s so many places I want to travel - California being one of them. So many places, so little time! Whereabouts do you live? :)

Dirk Dupon | 14 August, 2008 at 8:51 am

Traveling will become an expensive hobby in the future if the oil prices will go up. The times are gone when you could fly overseas for almost nothing. But don’t let that stop us ;-)

Darren Cronian | 14 August, 2008 at 12:57 pm

@ Dirk

It depends where you live I suppose. Ryanair despite the oil rises are still offering free or 1pence flights, but your right, long haul flights are going to be priced out for the majority of us.

James | 20 August, 2008 at 11:05 am

I fly at least 3 times a year to Florida so imagine how expensive that is. Everytime the prices seem to go up. I can’t see any of them lowering the fuel surcharges, but if the do they will put the price up on something else.

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