It’s no secret the airline industry wants you to pay extra for everything. And I really mean everything.
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FEES
It used to be so simple: The price you were quoted for an airline ticket, rental car or cruise used to be the price you actually paid.
On second thought, maybe you should leave home without it.
One of the most compelling arguments against excessive luggage fees is that they were actually hurting the airlines’ bottom line — that by adding these extras, travelers were turning to carriers like Southwest and JetBlue, which don’t charge for the first checked bag. But it turns out that’s not true.
I am Patient Zero for attention deficit disorder, which may explain why more than a few people with legitimate grievances e-mail me back after I’ve responded to their questions, asking me if I even bothered to read their inquiry. I did, but I was probably distracted by a screaming child in my home office or a kitten scurrying across my keyboard.
Deloitte’s Simonetto: “It’s easy to view this as the big, bad airline taking advantage of travelers”
Mike Simonetto is the principal and global leader of Deloitte Consulting’s pricing and profitability practice. With airlines and other travel companies testing our willingness to pay fees, I wanted to ask a pricing expert like him why travel companies were doing this and where it’s all headed.
My friend Addison Schonland said it best: Anyone who thinks baggage fees are going away is living on another planet. And as if to underscore that point, IdeaWorks has released a survey that shows ancillary revenue is up 345 percent from 2006, to an eye-popping $10 billion last year.
Airlines are really getting carried away with these luggage fees. Last week, I noted that carriers are effectively demanding a ransom in exchange for transporting our personal property. I suggested they might try being more upfront about their fares.
If you think fees are outrageous here in the United States, may I suggest a European vacation?
Minisha Kochar recently visited Spain, where she rented a car through AutoEurope. Before her trip, the company quoted her a “guaranteed” rate of $818.
Needless to say, that’s not the rate she found on her final bill.
Sidestepping this year-old airline rule was pretty easy up to this point. Flight attendants and gate agents routinely waved passengers with too much luggage through, hoping to avoid a confrontation. But now that baggage fees are generating serious money — they accounted for $1.5 billion in 2008, according to the Transportation Department — airlines are less likely to let the surplus bags slide.
Matthew Darrah is a senior vice president at Enterprise, where he oversees North American operations for Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car. I asked him about the summer’s skyrocketing car rental prices and what travelers should do about some of the new fees they’ve seen on their rental bills.
That would be American Airlines, according to the latest government-reported numbers for 2009. The rest of the list may surprise you even more.
United Airlines and US Airways lead the pack, according to the Transportation Department, charging their customers $78 million and $66 million, respectively. (The figures on the chart are for the first quarter of 2009, and are in millions.)
When it comes to fees, never underestimate the car rental industry’s creativity. If you do, you might miss the six percent surcharge that Avis slipped on Monica Huchro’s bill last week.
If this isn’t a bait-and-switch, I don’t know what is. Jonathan Yarmis thought he was getting a $375 a night room rate at the Hotel Bauer in Venice, marked down from $537.
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