Airline fuel costs are (were) largely hedged so the true cost to an airline isn't reflected in day-to-day fuel prices. Worse yet - most airlines bet the wrong

Airline fuel costs are (were) largely hedged so the true cost to an airline isn't reflected in day-to-day fuel prices. Worse yet - most airlines bet the wrong way on the movement of fuel prices and locked in expensive hedges that they've made huge losses on now. Southwest were praised for locking in fuel prices when oil rallied[1] but since the market turned they have lost $1.8 billion on their positions[2] Ryan Air locked themselves in for 3 years at ~$800-1000 per ton[3] Delta lost over $2 billion, United over $600 million[4] Fuel was traditionally 20% of an airlines cost base but peaked up to 35% (see this[5] super interesting chart). The surcharges are noticed because a lot of airlines have restructured ticket pricing to the point where the 'base fare' is only 40-50% of ticket cost. One reason for this is that a lot of reward programs were restructured so that only the base fare is redeemed while the surcharges are paid (effectively devaluing frequent flyer miles) But there is an even simpler reason why you likely weren't being overcharged for fuel: you were flying Qatar airways. The new batch of airlines from the gulf states have been making huge losses in an attempt to buy market. [1] http://abcnews.go.com/Travel/story?id=5918252 http://abcnews.go.com/Travel/story?id=5918252 [2] http://www.usatoday.com/story/money/cars/2016/01/25/airlines-fuel-price-bets-not-always-paying-off/79288102/ http://www.usatoday.com/story/money/cars/2016/01/25/airlines... [3] http://www.reuters.com/article/us-airlines-fuel-hedging-idUSKCN0RM0FN20150922 http://www.reuters.com/article/us-airlines-fuel-hedging-idUS... [4] http://www.bloomberg.com/news/articles/2015-11-25/airlines-bet-on-long-oil-slump-after-millions-lost-to-hedging http://www.bloomberg.com/news/articles/2015-11-25/airlines-b... [5] http://imgur.com/z874RuC.png http://imgur.com/z874RuC.png