Airline fuel surcharges

Here's what's going on with those "fuel surcharges"Warning: For numbers geeks, accountants or engineers only (I resemble that remark!):When oil price increases, airfares have to increase, the two are highly correlated. We know why (duh) but here's the numbers:It takes roughly 35,000 to 40,000 gallons of jet fuel to get a big aircraft (747 or 777) from North America to Europe (depending on aircraft type and route). Doing the math: 35,000 gal x $4.50/gallon (aviation fuel is more expensive than auto fuel) = ~$160,000 on the Captain's credit card to fill up his Boeing trans-Atlantic jet on the US West Coast. In a time period when oil and jet fuel prices double, all airlines encounter roughly a doubling of their fuel cost to get you and the other 399 people on that jet to Europe, which works out to an increase in their cost of 35,000 gal x $2.25 (half of $4.50 assuming fuel prices have doubled) = ~$80,000 increase in fuel cost in the last 2 years. If they were just breaking even before and want to keep just breaking even, airfares have to be increased by about this much: $80,000 fuel cost increase divided by 400 passengers on a full jet = $200 per seat increase in airfare. And that sounds like about what we've seen happen to airfares in the last year or two.Every time you hear in the news that oil price increased, you can figure airfares will go up, there will be a time lag because airlines don't pay spot prices for fuel, but they can only dodge the bullet for so long. This is a simplified example, but I did check the fuel capacity of the Boeing 747 and 777 trans-Atlantic aircraft. Of course the real world is more complicated because the airlines buy fuel in advance to try to lock in fuel prices, etc.

Maryann, no surprise there. Even cruise lines are increasing their prices.