Time to reign in the biggest hidden airline junk fee.

President Biden just signed the FAA Authorization Bill which contained a lot of good things for consumers, but leaves the giant hidden airline junk fee.

hidden airline junk feeThe bill tackles some hidden fees, requires airlines to let families sit together without a fee, and requires requiring both airlines and ticket agents to disclose mandatory carrier-imposed fees. All good things.

(Although the disclosure of additional fees can be confusing, but that’s a different post.)

One thing the FAA and DOT are not touching, however, is “carrier imposed surcharges” on international tickets, especially flights to Europe.

These are much higher than any other airline fees. In fact, for business class tickets to Europe, the surcharges just broke the $2,000 barrier

Here, for example, is a fare total for a highly discounted ticket from San Francisco to London.

To explain the jargon, yes, the fare is $2,029.00 – but with taxes and fees, the total is $4236.20.  Now many of the extra charges are real taxes, but not the YQ – the “2000.00 YQ.”  It’s the carrier-imposed surcharge.   Airlines used to call these fuel surcharges. Airlines costs started out in the hundreds of dollars and have been going up rapidly. In addition, airlines realized it didn’t make sense to call them fuel surcharges at times when fuel surcharges went down.

FARE USD 2029.00 TAX 44.40 US TAX 2162.80 XT
TOTAL USD 4236.20

.00NUC2028.50END ROE1.0 XT 2000.00YQ 76.50OY 27.70R
A 21.50DE 9.20RD 7.00XY 6.97YC 5.60AY 3.83XA 4.50XF

Since the overall fare isn’t bad, why does it matter? If the consumer is satisfied with the price?

Irritated by hotel resort fees?Because the carrier-surcharges are non-discountable, and pure profit for the airline. And travelers are all paying more because of them. Even on a discount coach ticket to London this fall, for example, *850 total, where the fare is usd $265, the “YQ” is $365.

Now, some international travelers if they book online may not notice the breakdowns, as they are not obvious.  And airlines, probably to keep it that way at least count their own surcharges towards qualifying spends for elite status.

But some travelers work for corporations with percentage corporate discounts.  Or sometimes travelers get group discounts. Or they buy the ticket through a brick-and-mortar or online travel agent. Or they get the flights as part of a package through a tour operator or a cruise line.

(If you’ve ever seen those ads for “Free Air” for cruises in Europe, it’s not that the cruise line has free air… it’s that they are covering the cost to get passengers to book.)

In all the above cases, the “net” ticket price is discounted. But the surcharges are not. And while contracts are confidential the discounts can be real money.

For example with the first mentioned discount class ticket if it’s a cruise line that’s getting even 10% discount on the ticket if the surcharge was part of the fare it would be $400 less they had to pay the airline.  With it separated, they pay $200 less.  Similarly it’s less discount to a corporation or commission to an agency.

If it’s a corporate fare, they pay more to travel.  And if a company is making less commission, they need to make it up somewhere, in higher service fees to clients, or in higher markup on cruises and tours.

Curiously, these outrageous fees are generally to Europe but not Asia. Now, major airlines in the US are an oligopoly, and they and their code-share partners move in lockstep on the surcharges. But for some reason,  perhaps more competition and fewer code-shares, these surcharges are a fraction in the Asian market – a $9000 business class ticket has only $432 as of today to Tokyo from San Francisco, though the distance from San Francisco to Tokyo is almost exactly the same as the distance to London.  And the fees don’t exist right now on flights to Latin America.  It’s all about where airlines think they can get away with it.

Join UsThere’s no justifiable reason for the surcharges on flights to Europe, and no one except the airlines benefit.

So how about it, DOT, time to reign them in?

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