International Flights Get Cheaper

Airlines are slashing fuel surcharges by 18 percent on flights from Chicago and other U.S. cities to Rome, Amsterdam, Madrid and Zurich. It's the first rollback after a string of extra fees this year.

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ALEX CHADWICK, host:

From NPR News, it's Day to Day. Good economic news, yes. Flying is getting cheaper, at least for some travelers. With oil prices falling, major airlines have started slashing their fuel surcharges, but only on certain international flights. Marketplace's Nancy Marshall-Genzer joins us now. Nancy, how big are these surcharge cuts?

NANCY MARSHALL-GENZER: Alex, they're about 18 percent on flights from some West Coast American cities to Germany and Italy. The surcharges are down by about 17 percent on some flights to London, but the surcharges have not been cut on flights to London from some East Coast cities like New York and, unfortunately, Washington, where I am. Good news for you, very bad news for me.

CHADWICK: Everybody's paying the same or, you would think, the same for airline fuel. So, why not lower these surcharges for domestic flights?

MARSHALL-GENZER: It has to do with supply and demand, Alex. We might see some decreases on very popular, competitive domestic routes. But for the most part, we will not get a break on this surcharge on domestic flights, and that's because the airlines permanently canceled a bunch of domestic flights, and they've really downsized domestically. So, that means the planes they are still flying in the U.S. are very full, even though fewer people are actually traveling. Airline consultant Darrell Jenkins (ph) says business travelers are keeping the planes full.

Mr. DARRELL JENKINS (Airline Consultant): If they're paying the fares that we're currently at, which are, quite honestly speaking, quite high, then I see little reason to change that.

MARSHALL-GENZER: But Alex, it's a different story on international flights, and that's why we're seeing the surcharges going down. The airlines have added a lot of planes on those flights because they thought that's where the money was, so those planes have empty seats.

CHADWICK: So, it may be these price cuts are not about fuel prices dropping, they're really about empty seats?

MARSHALL-GENZER: It's actually a little bit of both. Some European airlines cut their fuel surcharges on flights to the U.S. in response to lower oil prices. So, U.S. airlines pretty much had to follow suit to compete. But they do still need to fill those empty seats. And I talked about this today with Tom Parsons, and he's the CEO of bestfares.com. He told me the airlines feel they have to slash the international fuel charges in order to attract passengers.

Mr. TOM PARSONS: (CEO, Bestfares.com): And again, an empty seat's an empty seat; they get no revenue. They would rather get a couple of hundred bucks each way in revenue than get zero dollars.

MARSHALL-GENZER: And Parsons says the airlines might have to lower the surcharges even a little bit more. We might not have hit bottom yet.

CHADWICK: Why not just cut the airfares?

MARSHALL-GENZER: Well, they actually have, Alex, a little bit. Last year, it wasn't unusual to pay $1,500 to Europe last summer. But now, fares to many cities in Europe are in the $500 to $600 range, especially from those West Coast cities, like where you are.

(Soundbite of laughter)

CHADWICK: I'll be traveling soon.

MARSHALL-GENZER: You should.

CHADWICK: Thank you, Nancy Marshall-Genzer, public radio's daily business show, Marketplace.

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