Flights, cruises impose fuel surcharges

Two weeks ago, Carnival Corp., the world's largest cruise operator, announced it's adding a fuel surcharge of $5 per day each for the first two passengers in a cabin on all of its ships, which includes lines such as Carnival, Costa, Cunard, Holland America, Princess and Seabourn. A few days earlier, the luxury operator Regent Seven Seas began collecting a $7.50 per person per day fuel surcharge.

Carnival's surcharges apply to bookings for cruises departing on or after Feb. 1, with a cap of $70 per person, per voyage, while Regent's are on new bookings for 2008 made after Dec. 1, 2007, as well as existing bookings not paid in full by then. They join other fuel-conscious lines such as Crystal Cruises ($5 per person per day) and the Norwegian cruise line Hurtigruten ($6 per person per day).

Fuel add-ons may be new on the ocean, but not in the air.

Carriers have been slipping in fuel surcharges for nearly a decade, primarily as a way to keep their advertised fares as low as possible or risk being undercut by the competition. Why don't they add a jetway surcharge or an advertising surcharge? Both are also part of their costs of providing service.

The argument doesn't make sense for other reasons.

You can book a nonstop first-class round trip on US Airways from Pittsburgh to Los Angeles (there still is one a day) for a base fare of $611.16 each way. In addition to taxes and other fees (for security and passenger facility charges) that add another $113.18 to your final bill, US Airways tacks on a fuel surcharge of $4.65 each way. That's the standard fuel surcharge US Airways adds to each leg of a journey these days. (Curiously, however, no fuel charges were assessed for a $456 economy reservation for the same flights checked at the same time.)

If the charge really is a per-passenger assessment for extra fuel costs, shouldn't the surcharge vary, based either on flight mileage or a percentage of the fare? Why should the customer who's flying to Washington, D.C., pay the same as someone headed to the West Coast? Does the same $697.50 extra they collect for added fuel costs on a 150-passenger plane for a 300-mile flight to the nation's capital really also get them to Los Angeles?

I'd like to know more about that propulsion system.

The fuel surcharge strategy unveiled last week by Air France makes somewhat more sense. They're adding 2 euros per segment on short and medium length flights, and 10 euros for long-haul trips. The carrier promises half this surcharge will be dropped if the price of oil stabilizes below $85 a barrel and it will disappear if crude falls below $80 a barrel.

Cruise lines have an extra incentive to tack on a fuel surcharge rather than increase their prices. By doing that, they also reduce the portion of their fares that is commissionable to the travel agents, who still book the majority of cruise vacations. They employ a similar tactic with other non-commissionable line items (such as port taxes, which have more to do with costs that lines incur in ports rather than any governmental fees).

All these pricing games make it harder for travelers to compare apples to apples when evaluating options. After all, cruise lines promote themselves as all-in-one-price vacations, including cruise accommodations, food, entertainment and often even transportation. Of course, there are always plenty of add-ons. Some are optional. Simply don't buy that expensive daiquiri, T-shirt or shore excursion if you don't really want it. If you want to be really cheap, you can avoid tipping the staff.

Other charges, such as port taxes, are more difficult to duck.

While a daily charge makes some sense on a cruise ship, why are they being levied on sailings so far in the future rather than those taking place now? Does that mean cruise companies can predict the future?

Since these fuel fees are assessed on a daily basis, they represent a greater percentage of the price on shorter cruises, the fastest growing sector of the industry. On a three-day trip, all the extras can boost the final price by 30 percent.

Realize that this is no chump change to the cruise lines. Assess $35 a week from each of a ship's 3,000 passengers, and you've collected an extra $105,000 to your bottom line.

Unfortunately, the way these charges are structured, passengers are a captive audience.

If you like negotiating, you can try to get the cruise company to cut you a break, but don't count on it. Of course, you should be aware of these extra costs when making your buying decisions.

Then, if the captain should ever come walking around the ship with hat in hand collecting contributions to buy some bunker fuel, you can confidently say you've already paid.