VAT only taxes added value. So, if VAT applied to fuel, the airline gets a VAT rebate for everything that they buy (including fuel), and then pays VAT on their

VAT only taxes added value. So, if VAT applied to fuel, the airline gets a VAT rebate for everything that they buy (including fuel), and then pays VAT on their total sales. Nothing is taxed twice. If there's some tax benefit to splitting a fuel surcharge out, obviously taxes on fuel aren't an ordinary VAT...