Heath Weatherbee of Atlanta, who was visiting family in Millinocket over the holidays, checks two bags at Bangor International Airport on Monday. Most airlines are continuing to charge for checked luggage, usually $15 for the first bag and $25 for the second. The Maine delegation wants Congress to look into airline surcharges that, despite lower jet fuel costs, have not gone down or been eliminated altogether. Buy Photo
AUGUSTA, Maine — Earlier this year, many reports surfaced of airlines adding surcharges to pay for higher fuel costs, freight companies adding fuel surcharges and even some restaurants and grocery stores blaming their higher prices on fuel increases.
Members of Maine’s congressional delegation want to know why in many cases, prices have not come down as fuel costs have plummeted in this recession.
“Why should the consumers be paying those surcharges when the price does not justify them any longer,” said Sen. Olympia Snowe, R-Maine. “I will be looking into that.”
She said many airlines imposed fuel and additional baggage handling fees blaming the high prices of jet fuel. She said prices of fuel have decreased dramatically, but few airlines have lowered their prices.
“And it’s not just the airlines,” she said. “We saw food prices here in Maine go up with the blame put on shipping costs.”
Snowe serves on the Senate Commerce Committee, which has jurisdiction over transportation issues. She said she expects the committee will want answers on why some surcharges still are in place long after the reason for their implementation is over.
Just before Christmas, some U.S. airlines joined with some other international airlines to reduce surcharges on international flights. The Air Transport Association of America said the average price of jet fuel for U.S. airlines was $3.91 a gallon in July and $1.89 a gallon last month.
Some domestic airlines also have stopped charging for checked baggage, but many are still imposing that fee. The additional baggage fees were justified by the airlines when they were imposed because of high jet fuel prices.
“We definitely have to look at this, the spikes in prices,” said U.S. Rep. Mike Michaud, D-Maine. “It’s not only the airlines, it’s other areas where we have seen spikes in prices.”
He said consumers should be protected and when surcharges are added for a specific reason, such as higher than expected fuel prices, and the reason for the surcharge disappears, the surcharges should also disappear. He said there also have been several price increases on items such as packaging that have been blamed on higher oil prices and those prices have also not decreased as the cost of a barrel of oil has plummeted.
“This is definitely something Congress needs to look at,” Michaud said.
He serves on the House Transportation Committee and said it is likely the panel will seek answers on why the surcharges are being continued after fuel prices have plummeted.
Sen. Susan Collins, R-Maine, said she is troubled consumers are still being charged higher prices for a whole range of items based on fuel surcharges that clearly are no longer justified.
“I think that reflects an uncertainty about the economy and questions about the future price of oil,” she said. “It does seem that companies are very quick to impose fuel surcharges and drive up the cost of everything when energy prices are high and when they fall we do not see a corresponding decrease in prices.”
Collins said the spike in prices due to oil and the reluctance of companies to lower prices now that oil prices are down is a symptom of the nation’s reliance on imported energy sources.
“I will be submitting an energy bill that builds on what we have already done to move us away from reliance on imported oil,” she said. “We need to look at the issue over the long term, and not just the current impact.”
U.S. Rep.-elect Chellie Pingree said consumers should not be asked to pay higher costs for transportation charges with the lower oil prices companies are now paying to ship goods. She said the recession shows a need for further consumer protections by Congress.
“The whole area of consumer regulation is far ranging and it has to do with things like airline fuel surcharges, but it also has to do with things like credit cards,” she said. “I think we will see a lot of legislation aimed at protecting consumers.”
The new Congress convenes Jan. 6, but lawmakers say it is unlikely much will be accomplished until after the new administration takes over on Jan. 20.
On 12/30/08 at 5:58 AM,
dreamland51 wrote:
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I totally agree with that. I remember before last summer you could get a 12-pack of soda for $2.50-$3.00 at Shaws. Now its $4.44 or some other bs like that... Price Gouging.
On 12/30/08 at 7:25 AM,
kevin77 wrote:
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Once they raise the prices on stuff they will never lower them as long as people continue to buy at the higher price.
On 12/30/08 at 8:26 AM,
wallyo wrote:
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If jet fuel is $1.89 why is fuel oil $2.69 Its basicly the same thing.
On 12/30/08 at 8:36 AM,
sickntired wrote:
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Has anyone noticed how they package meat these days? Once upon a time stores took pride in the fact that their meat was trimed of fat and such. Now they hide fat and crap under the meat, especially in packages of chicken. Have you bought a whole chicken lately? Mighty strange animals they are raising these days.... 3-4 livers... multiple gizzards and necks..... and the prices keep going up and up. Hamburger... the only diffrence between 80% lean and 90 % lean is how much red dye they put in it. Bought some ground serloin the other day and after making patties my hands looked like I was wearing red gloves.
On 12/30/08 at 8:45 AM,
AlwaysThinking wrote:
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I am thinking that we do not need the government to keep trying to protect consumers. Lord knows that every time they meet and pass laws it makes life more dependent upon those who are supposed to be serving US!
What needs to happen is to let free enterprise and the law of supply and demand take its course. If people stop flying then they will have to drop prices or surcharges to retain business. If they do not drop prices or surcharges then they go out of business.
Oops! Silly me, I guess that will not work as the government (or should I say, "you and me") will just hand them a few billion to keep running!
I sure feel bad about what taxes will be like for my son when he has to start working! (Of course with the new administration coming in on 1/20, perhaps he will not have to work and pay taxes anyway)
On 12/30/08 at 9:03 AM,
windfuture wrote:
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As a shareholder, I'd say drop the surcharge when you've made back your losses. Does anyone really think we should be getting free rides on airplanes at less-than-cost? How many trucking companies went out of business when loads were few and fuel was expensive. Give them a chance to make back a little of what they lost.
On 12/30/08 at 9:08 AM,
chemaine wrote:
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"What needs to happen is to let free enterprise and the law of supply and demand take its course."
Hey stupid, how'd "let free enterprise and the law of supply and demand take its course" work in the financial market?
I'll give you a hint, it dropped the stock market almost 40% in the past 6 months because morons like you thought government control was bad. Now most people are sufferign losses in their retirement savings plans, if they haven't lost jobs.
If "free enterprise" didn't work in the most capitalst aspect of the economy, why would it work elsewhere?
On 12/30/08 at 10:48 AM,
augustagoverned wrote:
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Good for Senator Snowe. She's onto something that has been endemic to the "free-ride enterprise system" forever: screw them (the public) as hard as you can for as long as you can - and call it "good business practices". All of these weasel companies should pay a fine equal to twice what they've ripped off the public. See how they react next time. Go get 'em Snowe.
On 12/30/08 at 11:30 AM,
LarrySG wrote:
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It's just a barely legal form of theft. A business like an airline of supermarket chain would tell you they still charge because there is a rumor that taxes will increase and they want to get a headstart; after all isn't that what the Maine Chamber of Commerce keeps telling us. The sky is falling, only up.
On 12/30/08 at 12:47 PM,
pjramsay wrote:
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One of the reasons for the continuing fuel surcharge is the fact that the airlines purchased into the hedge funds for fuel. Their prices ranged from $78 to $98 per barrel. Since the prices have fallen below $38, they incurred a loss on the hedge. We, the consumer, will now have to pay for those losses. This is similar to those folks that bought into the guarantee for home heating oil.
Most international carriers and cruise companies have dropped their fuel surcharges. Some hotels have also dropped their energy surcharges as well.
The current price for stop fuel in Bangor is $3.50 per gallon for 100LL (prop planes) and $3.34 per gallon for jets. I believe the ATA "guestamite" was a contract rate.
The real problem here is the airlines are double-dipping. They are charging more for tickets and charging a fuel surcharge. They are also charging for baggage, meals, drinks, and in some cases, aisle seating. They will charge extra if you call them to book your reservation and they charge for free tickets too.
I think the biggest rip-off is pets and unaccompanied children. Checking a pet can cost up to $275 each way. Taking your pet onboard with you (no cost incurred by the airline) will cost $150 each way. Children traveling alone costs $100 each way.
If the government forces the airlines to remove the surcharges they will in turn increase the price of the tickets. We saw 30 fare increases in 2008. It is estimated that the rates will go up another five percent in 2009. If the surcharges are removed, look for a 12 to 18 percent increase in the price of an airline ticket.
Once Delta and Northwest complete their merger, we may see a reduction in service in Maine. With less than a dozen flights per day out of Bangor, traveling to Portland, Manchester or even Boston has become more popular lately. Allegiant Air has helped, but even Allegiant is charging over $566.50 roundtrip to Sanford for February school vacation. Airtran out of Portland (same dates) runs $441.50.
To put things into perspective - look at the Little Debbie Fudge Round Cookie. In June they were pricing at 25 cents. Today the same cookie (I swear they look smaller) is 50 cents - a 100% increase in price.
We need a congressional hearing - now!!!
On 12/30/08 at 3:07 PM,
garrisgammaw wrote:
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In Lewison the Burger King had a sign on the window that they would now be charging extra money for condiments such as bbq sauce and honey mustard etc. due to the gas prices. Now the gas prices have dropped and the sign is down but they are still charging for the condiments as well. Once prices have risen they will not again drop. We are a two income family and have two teenage boys in the home, groceries if we buy what we want and lunch box groceries as well would cost me 200.00 a week but we have cut it back to 125.00 a week. If we were a one income family we would not be able to provide healthy meals. This is out of control.
On 12/30/08 at 4:10 PM,
AlwaysThinking wrote:
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Well chemaine, if the government had NOT demanded that lending institutions lend money to deadbeats, illegals, and people who could not afford it we would not have been bailing them out would we. It sounds like you will enjoy the social programs that will be forthcoming with the new administration. Me, I will fall in the mud and drag myself out on my hands and knees before I let them get me on the system. Sorry, just the way it is. Sometimes it hurts to be a free country, lest we forget.
On 12/30/08 at 4:31 PM,
mariahstorm wrote:
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Now this is Maine People as i knew it ! Thank you Senator Snowe ! We the People would really like to see a document on "what we have already done" to move away from fuel energy and 'where' it was done and by whom from Senator Collins ! Also, what is her interest in DownEast Energy, the worst Servce Company for 'extra charges'. Once again Sen. Snowe Welcome Back!
On 1/1/09 at 1:05 PM,
ravenh2001 wrote:
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Wait for the whole market to correct. We buy our oils 6 months in advance of expected sales so that the manufacturer can employ a year round work force. they do the same. If we drop our price and lose money we go out of business then the manufacturer goes out of business. out of work people don't buy your product you go out of business. conserve, make some money, stay in business at a lower profit and the economy will rebound faster.
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