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BA did not “make a huge profit” from the fuel surcharge.

There was some evidence of industry-wide fuel surcharge price fixing, for which a fine was paid (on a different evidential basis), but the subsequent trial collapsed in a fiasco, with evidence being presented that no criminal collusion had taken place:

There may be the potential for profiting from fuel hedging, and many airlines have done OK on this front, but as with any hedge, sometimes they will profit other times they will not; it is only really about helping out with short term cashflow.

I don’t see anything wrong with the fuel surcharge on redemption tickets; some airlines charge for an extra bag, on board drinks etc. and in the scheme of things these charges usually stack up to about the same amount. While the charge on redemptions may be perceived to devalue the value of frequent flyer miles, the alternative would simply be to charge more miles (and I think some airlines do allow you to use miles to offset the fuel/taxes); as for many people miles are harder to come by than cash, and there is a clear relationship between the cost of flying an aircraft in fuel terms and the fuel surcharge, this is a solid business model.

I agree it should always be bundled into the price quoted, and BA does this from the very start, unlike other airlines which load the surcharge on at the end, which isn’t very transparent at all.