How Fuel Fees Are Keeping Airfares Aloft

As fuel prices have soared over the past year, airlines have looked to fliers to help shoulder the burden. Rather than relying solely on higher fares, carriers are embracing an alternate revenue savior: fuel surcharges. The levies—paid in addition to the standard airfare—can be hefty. U.S. airlines including United Continental Holdings (UAL) and Delta Air Lines (DAL) have recently instituted a record $420 fuel surcharge for some round-trip fares to Europe. Across the industry, current surcharges are as much as 50 percent greater than those put in place when fuel prices hit a record three years ago, according to air-travel website BestFares.com. Now fuel accounts for almost half of some fliers' tabs. On a Delta flight from New York to London next month, for example, the $362 fuel surcharge accounts for a full 40 percent of the $897 roundtrip ticket price.

"[Airlines] are getting smarter," says Michael Derchin, an analyst at CRT Capital Group. "Even if fuel prices go down a little, you can bet that the surcharges will stay because they need it."