LITTLE ROCK — Rising fuel surcharges have become a sticking point in negotiations between airlines and corporate travel managers over the cost of airline tickets.
The charges were initially tied to the rising cost of fuel, but industry experts say they have turned into a way for airlines to increase fares.
“Airlines can use fuel surcharges as indirect fare hikes and masquerade them as fuel surcharges,” said Henry Harteveldt of the Atmosphere Research Group and a travel industry analyst in San Francisco.
“It is a way for an airline to indirectly raise its fares without signaling to its competitors that it’s trying to raise fares,” Harteveldt said.
Corporate travel managers say that while they have begun to raise the issue with airlines, the surcharges are not being discounted.
“It’s one element that needs to get into the mix for negotiation,” said Michael Steiner, an executive vice president of the Ovation Travel Group, a travel management company in New York.
The International Air Transport Association, a trade group for airlines, declined to comment on fuel surcharges. Spokesman Miriam Ashong said the surcharges were “quite a sensitive topic.”
“Fuel dropped back down, but carriers have not dropped fuel surcharges,” said Brent Eisenach, director of the CWT Solutions Group, Americas, a business travel management group based in Minneapolis. He estimated that fuel surcharges now represent about 7 percent to 12 percent of total corporate travel spending.
Business travelers are spending more on fewer trips, according to the Global Business Travel Association. The association projects that total business travel spending in the United States will be 2.6 percent higher in 2012, reaching $257 billion.
At the same time, total business trip volume — the number of business trips — is expected to drop to 438.1 million this year, down 1.6 percent from 2011.
Business, Pages 68 on 11/25/2012