Look into the price of fuel. Aircraft fuel prices can be quite volatile, rising and falling with market conditions. A fuel surcharge allows the charter company to recoup some of the costs when the price of fuel jumps above the average price included in the company's rates. Surcharges can also be quickly dropped when the price of fuel falls without having to recalculate the entire charter rate structure.
Understand the charter business model. Charter airlines compete with one another to offer lower rates for a given route; incorporating fuel surcharges into their base rates make those base rates look higher compared to competitors who keep the surcharge. This may result in a drop in business for the charter company, since not all customers do enough research to understand how the fuel surcharge affects the cost of their charter.
Recognize the profit incentives built into fuel surcharges. Surcharges may be set to cover the highest cost of fuel seen during a given period; when the cost of fuel falls and the surcharge remains unchanged, this is extra profit for the charter company. Surcharge rates that are based on mileage rather than the actual price of fuel can thus become an extra fee on top of the charter hire price. As long as customers don't question the level of the surcharge too closely, this can be an excellent way of generating extra revenue while not losing customers through explicit rate increases.
