Major airlines slashing fuel surcharges

For the first time since oil prices began their meteoric rise this year, airlines are slashing fuel surcharges on a major international route: most flights between the U.S. and Europe.

It’s the first roll-back of the largest of the bewildering new fees that have driven up the cost of flying this year, while making it increasingly difficult for airline passengers to get a handle on travel costs.

In the last week, carriers have dropped their fuel surcharges by 18 percent, to $280, on flights from Chicago and other U.S. cities to Rome, Amsterdam, Madrid and Zurich, according to Tom Parsons, CEO and founder of Bestfares.com.

On flights departing to London from cities west of the Mississippi, fuel surcharges have declined 17 percent, to $366, according to Parsons.

Crude oil prices have plummeted in recent weeks to about $80 per barrel, driven down by concerns that a global economic slowdown will slate the world’s thirst for fuel over the next year.

Now, airlines are starting pass along some of the savings to those with the means and inclination to travel to Europe this fall.

The trend means passengers heading across the Atlantic over the next few months will pay less than they would have this summer, when oil was near $140 per barrel. But even so, they aren’t likely to see bargain-basement fares.

For example, all major airlines flying from Chicago’s O’Hare International Airport to London Heathrow Airport, have lowered their base fare to about $160, round-trip. Fuel surcharges on those flights have remained steady this month at $302 per passenger, round-trip, Parsons said.

Even so, other fees and tariffs bring the total cost per passenger for a ticket to about $620, round-trip. And that doesn’t include the added cost of checking bags.

The drop in fees and low base fares may signal that airlines are having difficulty attracting passengers to Europe as a result of the market mayhem, analysts said. As they cut back domestic flying this year, U.S. carriers have been shifting planes to trans-Atlantic routes, where prices remained high through the summer.

Now, carriers may be stuck with a surplus of planes on those routes as demand for flying slows because of the economic crisis.

“Is this really going to be enough to lure people back on planes in this economic crisis?” Parsons asked.