This evening in the 8:00pm EST U.S. domestic airfare distribution the FareCompare.com proprietary airfare processing system noted significant fuel surcharge increase activity by Delta Air Lines. Before this evenings 8:00pm EST U.S domestic airfare distribution Delta Air Lines had a system-wide fuel surcharge of $4.19 ($5 with tax) each way. At 8:00pm EST this evening Delta increased this surcharge to $13.95 ($15 with tax) each way - effectively hiking the bulk of their U.S. domestic airfare by $20 roundtrip ($10 each way)…

First, there is no difference between adding a fuel surcharge and increasing a base U.S. Domestic airfare - the consumer feels the same pain at purchase time and the same amount of revenue flows to airline.

Second, legacy airlines are starting to use more complex surcharge rule filings - instead of just hiking the base airfare - which is a source of confusion for competitors and allows a particular airline to more quickly rollback if required.

his is the 10th attempted increase since Labor Day Weekend and is broad based covering both leisure (14 days or more advance purchase) and business airfares on over 19,000 U.S. domestic city pairs.

A quick check of Delta hub cities Atlanta and Cincinnati shows that the increase was NOT applied to their current holiday off-peak special airfares (very limited days) and was not applied to their cheapest limited seat “T-class” leisure airfares good for travel through February 13th. I would estimate less than 10% of the traveling public would be able to purchase seats these particular airfares.

It should also be noted that those traveling on Delta and connecting in Memphis and Houston are also being charged an additional $4.19 ($5 with tax) each way on top of this increase - this would appear to be matching previous similar increases in these Northwest and Continental hub cities.

The rule text from a 3rd party GDS (Global Distribution System) confirms the increase in fuel surcharge and is noted as follows:

12.SURCHARGES
IF THE FARE COMPONENT INCLUDES TRAVEL VIA HOU OR IF THE FARE COMPONENT INCLUDES TRAVEL VIA MEM.
MISCELLANEOUS/OTHER SURCHARGE OF USD 4.19 WILL BE ADDED TO THE APPLICABLE FARE.
AND - MISCELLANEOUS/OTHER SURCHARGE OF USD 13.95 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE.
MISCELLANEOUS/OTHER SURCHARGE OF USD 13.95 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE.


The simple translation of this rule is: $15 (w/tax) surcharge each way (30$ roundtrip w/tax) and an additional $5 (w/tax) surcharge each way ($40 roundtrip w/tax) for those connecting in Houston or Memphis (note tax rate is 7.5%).

This Delta Air Lines $20 roundtrip system-wide increase on flights of all distances would have been unprecedented except for the fact that American Airlines initiated a similar across the board $20 increase (matched by all legacy airlines) on the 31st October.

The frequency and overall stickiness of these increases has me wondering how high U.S. domestic airline ticket prices might go in a $100+ barrel of oil environment - it is pretty obvious that legacy airlines have not hit a point yet where they are skittish about continued airfare increases and that the lower cost airlines who had previously foiled increases in years past are not giving the legacy airlines much pause when it comes to increases in an atmosphere of 80+% load factors and unprecedented jet fuel costs.