The Iran War affects ticket prices.
Airline travelers are facing sticker shock as rising fuel prices cause higher airfares, especially internationally. The Iran war affects ticket prices.
Hidden fuel fees make transatlantic flights more costly than transpacific flights.
All international fare increases are not created equal. Especially with European airlines, fuel fees factor into the equation. In some cases, airlines just raise airfares, but what many prefer to do is raise fuel surcharges. It makes it appear that they have left the airfare untouched,
Check the frequent flier pricing charts to determine what is being charged as a fuel surcharge.
The trick foreign carriers use is to sell frequent-flier tickets for only the airfare. The fuel surcharges are then added. To find out what the real fuel surcharge is, check the frequent flier airfares and compare US and European pricing. Otherwise, the prices seem exactly the same.
US airlines don’t have the freedom to move the frequent flier charges out of the overall airfare cost. This is a big difference between international and US pricing rules.
FF prices are a surprise way to figure out fuel surcharges.
As of March 24th, for a Premium economy ticket that is $2,852.00 from San Diego to London, the “fare” is $1,900, and the fuel surcharge is $952.
To Europe right now a business class fuel surcharge costs about $2,500. A $6,300 ticket from San Francisco to London has a “fare” of $3,300 and a fuel surcharge of $2,555 (up $400 since the war started.)
But to Asia, where a roundtrip price from, say, San Francisco to Hong Kong is $5,921, the “fare” is $5,489 and the fuel surcharge is only $300.
This surprising difference in the frequent flyer cost is determined by how the fuel surcharges added to the US-dollar airfares are constructed.
Why the difference?
Because the national carriers to Europe from the US, including foreign carriers (British Airways, KLM, Lufthansa, Virgin, etc.), generally choose to put much of their total price in surcharges. Airlines to Asia have much lower surcharges and more of their prices in the actual fare.
How the fuel surcharge is handled is a US law.
Curiously enough, a ticket from Seoul to Zurich on Lufthansa for about $6,900 had a fuel surcharge of only $600. So it’s clearly an issue just on tickets involving the United States.
Even though major airlines are not a monopoly between the US and Europe, they ARE an oligopoly. And they move pretty much in lockstep.
No major carrier to Europe is currently charging smaller surcharges and higher fares. Do they actively discuss this monopoly behavior, or just follow each other?
The airlines are playing “inside baseball.”
If this seems too “inside baseball,” you may ask yourself, does it really matter how a fare is calculated? Actually, in many cases, yes.
The fuel surcharges are nondiscountable.
This means if a big corporation or tour operator has negotiated a discount, the traveler still pays the full surcharge. And if an airline has a commission agreement with preferred travel agencies, it doesn’t pay commission on the surcharge. Most do have some such arrangement.
So, even for those who don’t work for a mega-company, this matters. With close to half of international tickets purchased via travel agencies, including online travel agencies, it makes a difference to consumers. When agencies make less money on tickets, they have to charge higher fees or they cut services to stay in business.
The result? For travel to Europe, airlines get to keep more of their ticket price undiluted, and consumers often end up paying more.
And in what is already shaping up to be an expensive summer for European travel, with the falling dollar it just gets worse.
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Janice Hough is a California-based travel agent a travel blogger and a part-time comedy writer. A frequent flier herself, she’s been doing battle with airlines, hotels, and other travel companies for over three decades. Besides writing for Travelers United, Janice has a humor blog at Leftcoastsportsbabe.com (Warning, the political and sports humor therein does not represent the views of anyone but herself.)
