Fuel surcharges continue for airlines, despite slumping prices

By Brad Foss The Associated Press
Wednesday November 28, 2001

NEW YORK — Most major airlines plan to maintain a fuel surcharge of $20 on each one-way ticket even though the price of jet fuel has dropped by half during the past year. 

The industry’s reluctance to drop the charge contrasts with the nation’s major hotel chains, which have eliminated the additional fees they put in place to help cover skyrocketing energy prices. 

“Regardless of what fuel prices do, our costs continue to rise and, especially in today’s market, we need every nickel we can get because we are still losing about $10 million a day,” said John Hotard, a spokesman for American Airlines, the nation’s largest carrier, said Tuesday. 

Industrywide losses are projected at $10 billion for the year because of drastically lower demand attributable to the recession and the Sept. 11 attacks. 

While airlines have cut fares to try to spur demand, they have stubbornly held on to the fuel surcharges, which now make up roughly 15 percent of the average domestic ticket price. 

Most of the nation’s largest airlines introduced a surcharge of $10 each way in February 2000 and then doubled the amount nine months later. 

, when crude oil was more than $30 a barrel. Oil prices are now below $19. 

A gallon of jet fuel costs roughly 52 cents today, compared with $1.06 a year ago. 

The only major airline without a fuel surcharge is Dallas-based Southwest. For its part, Delta Air Lines said it has maintained a fuel surcharge of just $10 on each one-way ticket. 

The surcharge is not necessarily apparent to travelers because it does not appear on airfare receipts. 

Major hotel chains such as Marriott and Hilton have gradually dropped energy surcharges of $1.50 to $5 per night that were imposed earlier this year.