Delta Adds Fuel Surcharge to Award Tickets

Delta Adds Fuel Surcharge to Award Tickets

In last month’s issue of InsideFlyer, we reported about the award fuel surcharge policies of U.S. and international carriers. While most international carriers add a hefty fuel surcharge to award tickets, U.S. carriers do not pass on the cost of fuel to passengers flying on award tickets. Delta SkyMiles is the first domestic carrier to announce that it will implement a fuel surcharge on all award tickets, effective Aug. 15, 2008. Northwest Airlines has already followed Delta’s lead (see related story) and we suspect that by the time this magazine is published another airline or two will also have added fuel surcharge fees to award tickets. SkyMiles members will be required to pay a $25 fuel surcharge roundtrip on award tickets between the U.S. 50 and Canada and $50 roundtrip on award tickets between the U.S. 50/Canada and all international destinations (this includes Mexico).

This latest fee is in addition to Delta’s “Partner Airline Handling Charge” of $25 that was recently introduced and is applied per ticket for booking award travel when at least one travel segment is on a partner airline. If you redeem your miles for an award ticket prior to Aug. 15, you will not be charged a fuel surcharge, regardless of your travel dates. The airline cites escalating fuel costs as the reason for the new fuel surcharge fee and Jeff Robertson, SkyMiles managing director, said “should fuel prices subside from current levels, we will reevaluate this surcharge.”

The way we see it, all of the recent changes in fees are essentially “fuel surcharges” whether or not the airline is calling it that, like US Airways’ new “award processing” fees that go into effect Aug. 6, 2008, of $25, $35 or $50, depending on the destination. With these fees, there’s not even a mention that there will be an end to them if fuel prices go down. And although pale in comparison, the new $5 charge for booking award travel online at American AAdvantage is another fee not likely to disappear if fuel prices go down (Executive Platinum members are exempt from this fee).

According to the Air Transport Association, jet fuel costs will contribute to combined losses of as much as $13 billion among U.S. carriers in 2008, but Delta is reporting that the airline expects a profitable June quarter and expects to end 2008 with $3.2 billion in unrestricted liquidity, down $600 million from Dec. 31, 2007.

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