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Question Description

I’m stuck on a Business question and need an explanation.

What are peak-day surcharges and why do the airlines charge them?

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Final Answer

Peak-day surcharges are one of the fastest-growing but least-noticed weapons in the domestic airlines′ arsenal of "ancillary revenue" sources. Unlike checked baggage fees and preferred-coach-seat reservation fees, the peak-day surcharges don′t apply on every flight, so travellers tend not to take note of them when they are searching for flights and fares.

Domestic air carriers use peak-day surcharges to capitalize on the basic rules of supply and demand. Peak days are days when the demand for air travel is greatest, and since the supply of seats generally doesn′t go up much on such days, the carriers feel justified in charging more for tickets – generally in the range of $20 to $60 per round-trip ticket.

Introduced in 2009 during busy holiday travel times, airlines have gradually been adding them to more dates, perhaps testing how many surcharges the market will bear.

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