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There are several factors and issues when it comes to fuel surcharges for airlines.
First of all - How big a quantity of fuel has the airline "hedged"? Hedging means buying say 60% of the yearly fuel consumption at a fixed price. If you hedge when prices are low then you are not that affected by increases in fuel prices.
This is most likely why Ryanair can avoid a fuel surcharge right now - If they bought the majority of their fuel for say $40 per barrel then they have a big advantage.
Secondly there is the aspect of unfair business. Some airlines get illegal government subsidies which makes it possible for them to suffer a loss on the fuel account.
If you have a number of airlines operating in the same market and all but two add a fuel surcharge then the remaining two have a big advantage but they are also bound to suffer a big financial loss. If this loss gets “paid” by their government then that it not only unfair to other airlines but also illegal.
Emirates is a fantastic airlines to fly with but they are also heavily state subsidized – that could be why they haven’t put on a fuel surcharge yet. Alitalia is another example – don’t know if they have a fuel surcharge but they have extremely cheap tickets even though the company is near financial collapse.
I think that pretty soon if the fuel prices continue at this level you will see most major airlines add fuel surcharges. I know that Lufthansa, Air France/KLM, Austrian Airlines, British Airways and Scandinavian Airlines are thinking of it.
The prices for air tickets are at an historical low. This is due to a shift in the market but also lowcost carriers only flying the attractive routes have had an impact. In my opinion this wont hold out for long – Many airlines are flying around with big financial loss due to the low airfares. If you take the 15 largest airlines in the U.S only 1 airline have actually succeeded in making a profit in the last five years – That is Southwest. In Europe you see Alitalia on the brink of closure and Swiss being bought up by Lufthansa. Earlier there was the big Air France and KLM merger. I think that in the next 2-3 years we will see a number of rather big airlines either shut down completely or being bought up by other more financially sound airlines.
By the way. It costs $5 to produce a barrel of oil in the Middle East – they are being sold for $58 at the moment. One of the main reasons for the fuel prices being this high is big investment companies speculating in oil prices and buying up huge quantities on the fuel exchanges in London and New York. Even though the prices are high now they have actually been higher. Back in the 80’ies the real price was twice what we have now because people earned less money back then. The price back in then would be $100 per barrel today.. Talk about fuel surcharge then…
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