British Airways was accused this week of using fuel surcharges to “trick passengers” on fares.

As oil prices fell to their lowest level since December 2007, BA said it had no intention of cutting the levy to match — which prompted the Air Transport Users Council (AUC), a passenger watchdog, to argue that the surcharge now bears no relevance to the real cost of fuel.

“BA is just pulling figures out of the hat and separating them from the main fare in order to trick passengers,” says James Fremantle, of the AUC. “The airline blames it on third-party factors that are supposedly out of its control, but in reality it is just a fare increase.”

Air France, Emirates and Singapore Airlines have already cut long-haul fees by an average of £10, while Iberia has cut fares by up to £47. BA’s long-haul levy, however, remains unchanged since it leapt last May from £116 to £218, despite oil prices having fallen by more than $50 a barrel from their July peak of $144. BA introduced fuel surcharges in 2004, adding £5 to the cost of a return flight as oil prices rose to a heady $40 a barrel. Since then, the charge has gone up almost relentlessly, skyrocketing by a staggering 4,260%.

In 2006, BA’s then commercial director, Martin George, pledged to “reduce the surcharge should fuel prices fall” — but that promise was kept just once, in January 2007, when the surcharge on flights lasting less than nine hours was cut by £10; this was in response to a $10 drop in oil prices.

At the time, the airline said that “reducing the fuel surcharge means that the amount customers pay better reflects the cost of fuel to BA for their specific flight”.

Now, despite oil prices plummeting, BA is making no moves to cut the levy. Instead, it argues that the drop in oil prices bears no relation to the price it pays for fuel. “Our fuel costs are up from £2 billion last year to £3 billion this year,” the airline said. “We need to raise that extra billion from somewhere and the fuel surcharge is just one of the ways we can do it.”

Despite continuing high fuel surcharges, air fares are falling fast, according to an industry survey published last week. Reduced demand has forced fares down: in the second quarter of 2008, the average price of economy tickets to short-haul destinations dropped by 12.5%; to Asia, Australia and the Far East by 22%; and to North America by 49%.

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