“The logic of breaking things out into components is pretty odd. It’s like a supermarket that sells margarine loading extra charges for the truck that drove it there.”
What an apt summing up of the controversial and confusing fuel surcharge issue currently hitting the international press and one that was included in a recent Sydney Morning Herald article that detailed plans by the Australian Competition and Consumer Commission to determine whether the “airlines had engaged in deceptive and misleading conduct” through levying passenger surcharges in an environment where the oil price has broken through US$60 per barrel over the past weeks.
While there can be no criticism against airlines for wanting to run a commercially viable and profitable business, it is the alleged use of the fuel surcharge to recoup costs in an environment, where the original reasons for introducing a fuel surcharge in the first place are moot, that has consumers all hot under the collar.
The argument is that customers would benefit more greatly if airlines instead employed cost recovery initiatives in their base fares to provide better transparency. Would the customer as willingly accept the surcharge if they knew that it was not a government tax, but in fact a fuel surcharge levied by the airline?
Would it be acceptable for industry to levy additional electricity surcharges on top of their service fees to compensate for higher electricity prices, or water surcharges or rate of exchange surcharges for that matter?
In the USA and Europe, airlines are mandated to advertise the full fare including all the extras – the government taxes, the fuel surcharge, etc. The way in which airlines comprise the fare is wholly irrelevant to the consumer, it is in fact the end price that counts.
As some airlines internationally and locally, including Qantas, SA Airlink and Mango, announce airfare or fuel surcharge decreases, and others like Qatar and Emirates consider doing the same, local aviation pundits say local consumers are unlikely to see a decrease in airfares, and more specifically, the fuel surcharge because the rand price of jet fuel remains volatile and has not seen as “significant an improvement as the oil price alone would suggest”. The volatility of the rand/dollar exchange rate and the hedging of airlines’ fuel above the current fuel price are also explained as factors.
ASATA is working with its members to define the extent of the fuel surcharge issue in South Africa and has released a survey asking its members to assist in our fact finding mission to campaign for a transparent and fair representation of airfares for the South African public.
Please take the time to complete this survey