PPRuNe Forums - View Single Post - Legality of fuel surcharges for airlines who have hedged costs
Old 6th Jul 2008, 10:35
  #4 (permalink)  
Capot
 
Join Date: May 2007
Location: Europe
Posts: 1,416
Likes: 0
Received 0 Likes on 0 Posts
It's an instructive exercise to calculate the probable revenue, with some very cautious assumptions about sector load factors and so on, received as "fuel surcharges", and set that against the probable total cost of the fuel used for the flight(s) that the surcharges are said to relate to.

Obviously to get the total cost you need to have the normal sector fuel burn data and, much more difficult, a figure for the real cost to the airline of the fuel burnt on the route in question. This can only be an average at best, but if one has some information about the real cost, ie the contract rate paid by the airline at various places, allowing for hedging, it's not very difficult to work out that even with a wide margin of error, the airlines have been having a laugh, with BA leading the field.
Capot is offline