The cruise lines drop fuel surcharges while the airlines won't give your money back


Carnival Corp., which in 2007 was among the first cruise companies to implement a fuel surcharge when prices spiked, has announced it'll be one of the first to get out. For 2010 bookings on the company's six major lines (Carnival, Costa, Cunard, Holland America, Princess, and the Yachts of Seabourn), the much-dissed fuel surcharge will be gone.

At the same time, Carnival said it would also be raising fares a little. The increase amount hasn't been announced yet, so it's hard to say from this vantage point whether it's just robbing Peter to pay Paul. But raising prices at this time of year is nothing unusual in travel biz, which sets its rates for the future well in advance.

For their part, the airlines of America are not budging. Last month, reps at several of them said that although fuel prices were indeed lower, they were still running higher than their accountants had expected when they set the current budgets, so the fuel surcharges would stay.

That doesn't entirely square with the rest of the air industry, though. Several international carriers, including Qantas, KLM, Air France, and Malaysian, have cut them. Northwest recently reduced its fuel surcharges for cargo, but not for people. All this while the major players in America and the United Kingdom are keeping them as-is. Some analysts are staying it'll stay this way at least until (and if) oil drops below $80 a barrel and stays there for a while.
Personally, I would feel better if the price of fuel was simply folded into the airfare, the way Air Canada has announced it would do. I know it's just a placebo effect because I'll still be paying more. But I accept that the cost of business has gone up. I just hating not being able to accurately estimate the true cost of my travel. With the new fuel surcharge, baggage fees, and food costs, it's not easy to figure out if the airfare I'm initially quoted when shopping is a good deal or will turn out to be a bait-and-switch. Knowing that depends greatly on my knowledge of which airlines are charging the most extra fees these days.

Which is a big reason why the airlines won't just fold the fuel expense into the fares. The first airline to do it will look like they have higher base rates until everyone else follows, and no one wants to look like the most expensive one. If the history of airfare pricing proves anything, it's that in the airline business, it's "monkey see, monkey do." No one wants to lead unless it undercuts a rival.

It's no mystery why the cruise lines are being so nice to us while the airlines tell us to get stuffed. Cruises are a luxury product that we can do without, but airplane trips are necessary to the fabric of our lives and our economy. The airlines, a quasi-monopoly, don't change because they don't have to. And so far, they seem content to be perceived as organizations that nickel-and-dime customers because, frankly, that expectation allows them to freely continue the practice.

And let's not forget that the airlines don't pay taxes on most of these extra fees, such as baggage fees, which they did when the expense was part of the airfare.

But don't fool yourselves, you sly steel tubes. We're not as complacent as you are. We're paying attention. We're keeping score of who's treating us with respect and who's manipulating us like easy marks and doubling prices at the last minute. And it'll come home to roost for you one day.

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