Delegation eyes probe on airline surcharges

Posted Dec. 29, 2008, at 8:35 p.m.

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.

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