Stop The Drop in Air Fares
We had gotten too used to it. Public pressure, unbridled competition between carriers, tremendous technological advances, the arrival of “low-costs” and the all-too-famous “yield management” have led to an almost constant decline in air fares, especially from the mid-1990s. And we had gotten used to it to such an extent that it was impossible to imagine the prices that passengers paid in the 1970s, which saw the appearance of mass transport with the arrival of very large aircraft. Well, those days are over, at least for a number of years.
Of course, manufacturers will continue their efforts to provide even more efficient devices, engine manufacturers are developing even more economical and less noisy machines, but all this comes at a price. Politicians in a hurry to give ecological guarantees to their voters are continuing their pressure on airlines by forcing them to become even quieter, and above all, to land at large airports without being detected. In other words, they are willing to use air transport on the condition that it does not harm the behaviour of the populations living near airports, and that the environmental lobbies have nothing to complain about, all the while demanding ever more competitive fares and even better services.
However, geopolitics is an essential component of air transport and sometimes, as is the case now, it creates a particularly delicate environment. The first effect of the current Gulf conflict has been a massive increase in the cost of oil and gas. While the price of a barrel had been stabilised at around $70 for at least a year, it has soared sharply since the beginning of the conflict in the Middle East and the closure of the Strait of Hormuz, to quote $112.66 at the time of writing. And airlines felt obliged to put the famous fuel surcharges back into circulation. And they didn’t go down without a fight. I have in mind the case of a long-haul company whose starting price is around €750 and which has added a fuel surcharge of €550, i.e. 73% of the promotional rate on which it relies to attract consumers. It is not the only one, and most operators do the same, even if not in the same proportions.
And I wonder why carriers, who are perfectly capable of adjusting their rates by the minute, choose the fuel surcharge method to charge for an inevitable increase in their cost price. It would be more honest, let’s say the word, to display the new price directly rather than maintaining the promotional hooks. It’s still taking consumers for fools. This practice is all the more curious because most carriers scream before they hurt. The largest of them practice “hedging”, which consists of protecting themselves from hazards by buying their fuel well in advance. Air France/KLM has covered its oil needs for the first half of 2026 at 87%, and Lufthansa is doing the same at 76%. That is to say, these companies do not feel the increase in the price of a barrel of oil while they make their passengers bear it, while camouflaging this increase in a fuel surcharge, thinking that consumers will accept this approach.
We can clearly see the strategy of operators who are afraid to display the true selling price, which would cause them to lose valuable positions in price comparison sites that essentially display call rates. However, customers will still have a little trouble admitting that, from a displayed price that could suit them, they end up having to pay an amount much higher than the advertised price.
I understand very well that airlines, whose economic balance is very fragile and whose profits are less than 10% of their turnover, unlike many other sectors of activity which gravitate above 20%, are very sensitive to anything that could cause their cost price to vary. It should be remembered that the price of fuel normally represents around 20% of turnover with oil at 70 dollars per barrel, but that it can easily exceed 30% in the event of a sudden and lasting sharp increase.
It remains to be seen whether the current conflict will last, in which case the carriers will have been right to familiarise their customers with this increase. If not, let’s hope that the operators will fight to be the first to stop these fuel surcharges while explaining that the time of continuous price reductions is over, at least for a long time.
