Airlines roll back fuel surcharges

Two attempts have flopped in 2008

By Tom Stundza -- Purchasing, 1/23/2008 11:13:00 AM

For the second time this month, major airlines have retreated from hefty fuel surcharge increases. American Airlines led the drive late last week to impose a $40 round-trip fuel surcharge on many domestic fares, but the increase has collapsed, according to the Associated Press. Big airlines have reduced that surcharge to $20. Earlier this month, a fuel surcharge of $50 on many round-trip tickets also failed to stick.

Purchasing.com earlier reported that the effort to recoup fuel costs would depend on market competition. And this week, Northwest Airlines told StarTribune.com that it “rolled back the fuel surcharge increase to remain competitive because the increase was not fully matched by all carriers.” Meanwhile, Terry Trippler, an airline expert, tells the Minneapolis newspaper that it is “highly unusual” for two back-to-back fare increases to fall apart in such a short time frame. “This tells me that the airlines may feel they have hit that price point where they noticed a drop off in bookings,” Trippler says.