Airline fuel surcharges have been a frustration for travel managers since the first day carriers assessed them. They were intended to offset rising fuel costs, but analysis by business travel consulting firm Advito indicates that these surcharges have become standard practice for airlines—no matter what’s happening with fuel prices. Indeed, fuel costs have stabilized over the past two to three years, but airline fuel surcharges have continued to increase.
Such surcharges, designated with a “YQ” code on airline tickets, are as appealing to airlines as they are annoying to travel buyers. YQs don’t get corporate discounts, and airlines pay less tax on them.
Today, fuel surcharges account for 16% of the average airline ticket, according to Advito’s analysis. What’s more, on some routes in Europe, fuel surcharges actually exceed airlines’ entire fuel costs—covering far more than the fuel price increases they were originally intended to offset. And YQ charges aren’t going away. As fuel prices have stabilized, some carriers have simply renamed YQ “fuel” surcharges, calling them “international” or “airline” surcharges instead.
In its recently released 2015 Industry Forecast, Advito offers recommendations for travel managers combating airlines’ YQ surcharges:
- Demand a breakdown from your airline of all YQ items. Ask the airline to justify its YQ charges.
- Let the airline know when YQ charges are not competitive with other carriers.
- Make up for YQ increases by pushing for higher discounts in markets where you have leverage.
Want to know what’s ahead for business travel? View the future with Advito’s 2015 Industry Forecast, and ask your account manager how BCD Travel and Advito can help you prepare.