Airline fuel costs are (were) largely hedged so the true cost to an airline isn&#x27;t reflected in day-to-day fuel prices.<p>Worse yet - most airlines bet the wrong way on the movement of fuel prices and locked in expensive hedges that they&#x27;ve made huge losses on now.<p>Southwest were praised for locking in fuel prices when oil rallied[1] but since the market turned they have lost <i>$1.8 billion</i> on their positions[2] Ryan Air locked themselves in for <i>3 years</i> at ~$800-1000 per ton[3] Delta lost over $2 billion, United over $600 million[4]<p>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 &#x27;base fare&#x27; 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)<p>But there is an even simpler reason why you likely weren&#x27;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.<p>[1] <a href="http:&#x2F;&#x2F;abcnews.go.com&#x2F;Travel&#x2F;story?id=5918252" rel="nofollow">http:&#x2F;&#x2F;abcnews.go.com&#x2F;Travel&#x2F;story?id=5918252</a><p>[2] <a href="http:&#x2F;&#x2F;www.usatoday.com&#x2F;story&#x2F;money&#x2F;cars&#x2F;2016&#x2F;01&#x2F;25&#x2F;airlines-fuel-price-bets-not-always-paying-off&#x2F;79288102&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.usatoday.com&#x2F;story&#x2F;money&#x2F;cars&#x2F;2016&#x2F;01&#x2F;25&#x2F;airlines...</a><p>[3] <a href="http:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;us-airlines-fuel-hedging-idUSKCN0RM0FN20150922" rel="nofollow">http:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;us-airlines-fuel-hedging-idUS...</a><p>[4] <a href="http:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2015-11-25&#x2F;airlines-bet-on-long-oil-slump-after-millions-lost-to-hedging" rel="nofollow">http:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2015-11-25&#x2F;airlines-b...</a><p>[5] <a href="http:&#x2F;&#x2F;imgur.com&#x2F;z874RuC.png" rel="nofollow">http:&#x2F;&#x2F;imgur.com&#x2F;z874RuC.png</a>