Airlines, cruise lines stand by fuel surcharges

ByABC News
September 18, 2008, 11:54 PM

— -- Despite lower crude oil prices, fuel-related fees added by airlines and cruise companies are here to stay.

Citing soaring fuel prices, airlines and cruise lines have added fuel surcharges and other transactional fees in the past 12 months to help recoup their costs. But the oil price is now far below the level at which it stood back in the summer, when the latest round of fuel surcharge hikes went through.

Earlier this week, the price of oil plunged below $100 a barrel for the first time in seven months, continuing a decline that has shaved nearly $50 off the July peak of about $147. Oil traded at about $97 on Thursday.

Cruise lines began adding fuel surcharges in November as oil prices first approached $100 a barrel. Royal Caribbean was the last major line to announce a fuel surcharge, in June, when it raised its daily fuel surcharge by $2 to $10 per person. "We continue to see considerable volatility in fuel price movements around the world and believe it would be premature to lower the supplement at this time," the company said in a statement.

Carnival Corp., the parent company of Carnival, Princess, Holland America and Cunard, raised fuel surcharges in June from $7 to $9 per day per person, and has no plans to roll them back. Carnival spokesman Tim Gallagher notes that the pump prices that cruise lines pay haven't come down as quickly as oil prices. "Our fuel prices for the ships don't drop nearly as fast as oil does, but they sure seem to go up every time there is a spike."

Major U.S. airlines also are reluctant to consider canceling the recently introduced fees. "They are not going away because the airlines are greedy," says Henry Harteveldt, a travel analyst at Forrester Research, adding that jet fuel is still 40% to 50% more expensive than a year ago.

American Airlines, Delta, United and Northwest say they're not canceling fuel surcharges. Major U.S. airlines have had fuel charges on international routes for years, but they've added them to domestic destinations in the past year, citing high fuel prices. They vary, depending on competition and distance. "The run-up in our cost related to our fuel prices continues to exceed the surcharge levels in place," says Northwest spokeswoman Michelle Aguayo-Shannon.