As airline revenue from extra fees increases, so does consumer ire

Airlines sure do love their fees, don’t they?

A recent U.S. Government Accountability Office (GAO) report revealed that domestic air carriers collected $7.1 billion in revenue from checked-bag and changed-reservations fees last year. The extra charges are helping the industry earn record profits. Read more “As airline revenue from extra fees increases, so does consumer ire”

Transportation department taps brakes on proposed regulation requiring disclosure of airline fees

The U.S. Transportation Department surprised the travel world last month by suspending the creation of an important new consumer-protection regulation. Read more “Transportation department taps brakes on proposed regulation requiring disclosure of airline fees”

“Unbundling” is a brazen lie and it’s time for the travel industry to come clean

McAuley/Shutterstock
McAuley/Shutterstock
It’s been five short years since the airline industry, led by an ailing American Airlines, quietly stripped the ability to check your first bag at no extra cost from the price of an airline ticket — an act given the antiseptic name “unbundling.”

At about this time in 2008, passengers were beginning to adjust to a new reality, as other airlines eagerly joined in separating their luggage fees from base fares. Now, they’ve finally accepted the fee revolution, according to most experts.

An airline ticket doesn’t have to include a “free” bag or a meal, no more than a hotel room should come with the ability to use the hotel’s exercise facilities, or your rental should cover the cost of a license plate. And that’s the way it should be, they say.

Well, the experts are full of it.
Read more ““Unbundling” is a brazen lie and it’s time for the travel industry to come clean”

“Airlines continue to insult my intelligence”

Don’t look now, but the airline industry is getting rich off fees. Very rich.

The industry collected $2.5 billion in luggage fees for the first three quarters of the year, according to data released by the government yesterday. The damage from ticket change fees? $1.7 billion.

Delta Air Lines wins in both ticket change fees ($530 million) and luggage fees ($733 million). American Airlines came in second place ($353 million/$431 million) and United Airlines took third place for change fees ($243 million) while US Airways showed in the baggage category with $388 million collected in the first three quarters of the year.

Needless to say, passengers are furious about these fees.

“Airlines continue to insult my intelligence,” says reader Scott Higbee. “The baggage fee is a money-grab, pure and simple.”

If this had been a legitimate “unbundling” action, then airlines would have lowered their fares when they added baggage and change fees, he says. But ticket prices didn’t go down. In fact, they’ve been increasing and are expected to rise even more in 2011.

(Ironically, the airline industry is still complaining about its profits, which it calls “pathetic.”)

There’s more to this story, and in order to tell it, I have to rewind to an earlier column about good airline fees and bad airline fees.

Good fees, as I explain, add a service that the airline didn’t have before, like onboard Wi-Fi; bad fees take something away that used to come with the ticket, like the ability to check a bag or make a confirmed seat reservation, without lowering ticket prices in a meaningful way.
Read more ““Airlines continue to insult my intelligence””

Spirit Airlines to charge for carry-on bags

Calling it the “next phase” of unbundling, Spirit Airlines a few hours ago announced that it would begin charging passengers for carry-on luggage. Seriously.

From the release:

In order to continue reducing fares even further and offering customers the option of paying only for the services they want and use rather than subsidizing the choices of others, the low fare industry innovator is … progressing to the next phase of unbundling with the introduction of a charge to carry on a bag and be boarded first onto the airplane.

Read more “Spirit Airlines to charge for carry-on bags”