For starters, spending on fuel surcharges probably dwarfs ancillary fees. Why? Unlike ancillary fees, surcharges are not optional. They apply to every passenger who buys a ticket with a surcharge filed as part of the fare. Quite different from those who may elect to pay for a checked bag or an aisle seat.
Now for the salt in the buyer’s wound – corporate discounts don’t (yet) apply to fuel surcharges. Does this matter? Probably not so much on domestic routes. But on international long-hauls? It surely does.
Matt Patterson at CWT has looked recently. “There’s no apparent rhyme or reason to these things. Domestically, I’ve seen a lot in the range of $10-30 one-way…but there doesn’t seem to be a pattern. However, they can easily be a few hundred dollars one-way on international flights.”
Not getting a discount on these surcharges makes no sense from a buyer’s perspective. Fuel is an operating expense, right? And they aren’t optional. Yet Matt or I don’t know of any airline that is giving discounts on them. Must be a sign of the airline’s pricing power.
Or maybe it has to do with the way these things are filed with ATPCO and then displayed in the GDS. Take a look at three ways these can be filed, and the display consequences:
Which begs three questions for you buyers out there:
- At what stage in the shopping/booking process do your travelers see the total cost of a flight?
- How much are you spending on un-discounted fuel surcharges?
- Could your booking system apply a corporate discount to a fuel surcharge?
Surely you want your self-booking tool to display total cost (base fare + fuel surcharge + taxes) at the point of comparing flight options. And surely you want your data reporting tool to capture and report these surcharges separately.
But what I bet you buyers really want is to get your corporate discount on this part of your spend. If anybody is doing so, let’s hear from you.
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