Passengers brace for another summer of airline fees

Photo courtesy Frontier Airlines.
Photo courtesy Frontier Airlines.

It isn’t shaping up to be a good summer for air travelers who are trying to stick to a budget. And let’s be honest: Who isn’t watching their bottom line?

A few weeks before the traditional start of the busy travel season, United Airlines quietly raised its change fees on most discount fares from $150 to $200, rendering many of its tickets all but unchangeable.

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American Airlines, Delta Air Lines and US Airways quickly followed.

Not to be outdone, Frontier Airlines announced that for tickets booked anywhere except on its Web site, it would raise its luggage charges and impose a fee of up to $100 for certain carry-on bags, the third U.S. carrier to do this. Most economy-class passengers will also have to pay $1.99 for coffee, tea, soda and juice.

You read correctly: That fee is for a carry-on bag, not a checked bag.

The moves provoked an immediate outcry from fee-weary passengers, who accused the now-profitable airline industry of making a money grab just as the vacation season begins. But a closer look at their frustrations shows that their options for fighting these new surcharges are limited.

“Airlines have crossed the line and will continue to cross the line, whether it be change fees, baggage fees or whatever other fees they can think up,” says Dale Mellor, a finance director from Steamboat Springs, Colo. “We are largely powerless.”

But just how powerless?

The Transportation Department, which regulates domestic airlines, has “no authority” to regulate the fees airlines charge. “But we do require them to include all mandatory fees in the fares they advertise and to disclose all other fees and significant restrictions to consumers before they purchase a ticket,” said agency spokesman Bill Mosley.

Can’t Congress do something? Not really.

A representative for the House Committee on Transportation and Infrastructure told me that there were no current efforts or legislation to limit the new airline fees.

Since jet fuel prices temporarily spiked in 2008, America’s legacy airlines have turned to fees as a way to ensure their survival, and although airlines might be loath to admit it, ticket change fees have grown slower than expected. From 2007 to 2011, the last year for which complete numbers are available, baggage fees collected by the U.S. airline industry increased more than sevenfold, rising from $464 million to $3.3 billion a year. By comparison, ticket cancellation and change fees only roughly doubled, from $915 million to $2.3 billion a year.

Airlines need the money, says airline fee consultant Jay Sorensen. “Fees are a necessary component of every carrier’s revenue mix today,” he says.

But passengers don’t see it that way.

“Are they going to make it $300 next year?” asks Alan Gore, an IT consultant based in Sedona, Ariz. If they did, the change fee would be just $74 less than the average domestic airfare. At that level, airlines would simply have to declare that their tickets can’t be changed at all.

Although airlines say that a change fee represents a combination of the cost to change a ticket and the missed revenue opportunity from potentially having a seat fly empty, Gore and others don’t buy it. Gore says that the only reason airlines can charge such high fees is “because passengers are so passive about it.”

Resigned, too.

Kirby Ortiz de Montellano, a San Francisco-based frequent traveler, wishes that she could leave United after it raised its change fees. “I would happily take my business elsewhere,” she says. But she feels as if she has no choice: United serves the destinations she wants to visit, and she has elite status with the airline, which ensures a minimum level of comfort, particularly on long-haul flights. “I feel that I am locked into a bad marriage with United,” she says. “I would welcome any suggestions on how to get a divorce.”

Here’s one: Try asking another airline to match your elite status. Of course, that in no way guarantees that the other carrier won’t at some point adopt equally onerous fees.

Joel Shenker, a neurologist based in Columbia, Mo., says that the new fees reinforce his belief that it’s “morally wrong” to give his business to an industry “that treats me so shabbily.”

He adds, “If I’m traveling medium to short distances, I try to do something other than airplanes if possible, even if it takes longer, and even if it may cost more. If I have to go a long distance, I’ll fly if I must.”

Unfortunately, there’s no workaround for this type of travel problem.

If you need to fly, you may not have a choice. And if you have to change your plans, you’re stuck with a change fee that could obliterate some, if not all, of the value of your ticket. Neither the Department of Transportation nor the legislative branch will do anything to stop this. So if you want to avoid a higher change fee, a fee for your drinks or an outrageous charge for bringing a bag on board, the only certain way to avoid it this summer is to drive or take a train.

Even Sorensen, the fee analyst, says that the latest airline charges may go too far. “My advice to airlines has always been: ‘Keep fees reasonable and at a level that wouldn’t have your mother receive criticism about her son from her friends,’ ” he says. “I think United’s recent increases violate that guideline. When these fees are too high, the airline will experience compliance issues at the airports and call center, counter, and gate staff will suffer the consequences.”

Interestingly, the ticket counter may be your only real chance for relief. Airline agents are often empowered to reduce or waive fees, and a polite request – not a demand – may be your best hope for avoiding the summer of 2013’s new crop of airline fees.

In fact, it may be your only hope.

Have the new airline fees crossed a line?

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49 thoughts on “Passengers brace for another summer of airline fees

  1. maybe you can get an answer because could not—

    frontier airlines say it will charge UP TO 100 dollars for checked baggage if you do not book with their site.

    is is based on what cities your are flying to?

    either way i love Virgin America and that will not charge anytime soon; the Frontier thing was just puzzling.

    1. impose a fee of up to $100 for certain carry-on bags

      That new up to $100 is for carry-on, not checked. The story you linked to also says carry-on.

  2. “Gore says that the only reason airlines can charge such high fees is “because passengers are so passive about it.”

    And if passengers weren’t so passive about the TSA it, too, would go away.

  3. Given the economics (actual airline fares allowing for inflation have declined) and the available options (fully refundable tickets are an option though expensive), to me this seems just the market at work.

  4. There are very times when you need to fly. Until consumers are willing to stop flying for a period of time the airlines will charge what they want. The only power a consumer has is their wallet.

    1. That’s the thing. I’m not willing to give up seeing my grandchildren grown up. I could take the train, I guess, or drive, but that would add 3 days to a week one way. And long-haul train is not cheap either.

      1. That is understandable. However, what it is going to take are people giving up that vacation on the opposite coast, businesses going more with video conferences, making sacrifices to tell the airlines enough is enough. What the airlines see are people still willing to pay as they continually move that line. Until people start voting with their wallets, that line will not stop moving forward. That point is going to be different for each person. For you, it has not reached that level yet. And that is fine. For me though, they crossed that line a long time ago and I no longer fly.

  5. Change fees don’t represent any cost. They represent an incentive to passengers who need flexibility to book flexible fares.

  6. Fly Southwest whenever possible–two free checked bags, no change fees and you can even change to a lower priced flight if it comew around and use the fare difference later. I really don’t know why anyone would fly another airline if Southwest serves the route.

    1. There are many reasons to choose other airlines. Mainly that Southwest is losing the friendly culture they used to have and is turning into just another airline. They have announced another round of changes which will make it more difficult to reuse funds when you don’t fly your originally booked flights.

      1. So making it more difficult to reuse funds is worse than an automatic $200 change fee? And they have a lot of “friendly culture” to lose before they catch up with the treatment from most other airlines.

        1. Herb Kelleher made the Southwest as we remember it. Herb is gone. Southwest is on its way to becoming a legacy carrier. Herb treated Southwest employees well, and employees in turn treat their customers well. This is basic Business 101. The legacy carriers treat their employees as a cost to be controlled. Southwest now does the same thing. That “friendly culture” you refer to is already well on its way out.

          Also, the whole concept of “no change fee” is misleading. Southwest discounts fares based on advance purchase. So for example, someone purchases a ticket well in advance and gets the maximum discount on that route. Then the day before travel they need to make a change to the next day. At Southwest, there is no “fee” to make the change, you just need to pay the fare difference to a no-advance purchase fare, which can (and often is) significant compared to the original discounted price. This difference is often more expensive than the legacy fee change, which may or may not have a fare difference attached. It is simply a different model.

          The problem with the legacy fee change model is the one-size-fits-all approach. In my opinion, it makes the most sense to be tied to how far in advance of travel it is. Make a change 2 months in advance? Small fee. The day before or day of? $200.

          1. Um, excuse me, but legacy carriers (non-Southwest) charge *both* the fare difference (as SW does), *and* the change fee, which is now up to $200 for legacy but zero for Southwest. The other carriers get money from both sides of the transaction. Southwest is only charging the fare difference – this is very different.

          2. Did you read the last sentence of that paragraph? “It is simply a different model.”

            But you are also wrong. If your same fare code is available — and it often is — then you ONLY pay the change fee to a legacy carrier with no fare difference charged. If your fare is no longer available on the flight you want, then yes, you have to also pay the fare difference. If you note, I also mentioned this originally.

    2. I would love to fly Southwest (I fly them to Vegas all the time) except for the fact that if I fly to New York, I’ll have to make a couple of connections.

    3. Why wouldn’t someone fly southwest

      .1 Might not be a convenient flight
      2.Lack of assigned seating, especially if you have a traveling companion
      3. Might not be the cheapest flight
      4. Lack of first class


      1. I stopped flying SouthWest a long time ago when they stole my money. I had a credit that I went to use for another flight. Called and made the reservation and paid the difference with a credit card. After 5 days without seeing the charge come through, I called back about it. They said the reservation number I gave them was not valid and would have to pay a higher fare now and I had no credit on the books. That was my $300 lesson on never to fly SouthWest.

        1. Funny how this is “stealing” your money (and I agree it shouldn’t have happened, and probably could have been fixed with enough follow-up), but you are exchanging that for paying extortionate fees for other airlines in similar situations.

          1. Nothing “funny” about it and it has no relationship with paying fees on other airlines. I paid Southwest for a service I never received. In the case of paying fees, the fees are for services I would have received such as check baggage. You can argue the price charged are excessive or unwarranted, but the fact is you know about them and pay for them. If you don’t want to pay them, you have a choice; don’t fly. In my case, I had no choice. I paid for a flight but was the service was not rendered.

    4. You also don’t pay baggage fees on Air Tran as long as you book the flight thru the Southwest web-site. If you book thru the Air Tran site, I think you still pay it. Doesn’t make much sense to me, but that’s the way it is.

  7. Which line are we talking about here? Because it feels like the industry has long since crossed several, if not dozens.

    As somebody who hates fees, the United and Frontier ones annoy the hell out of me. But, as my two preferred airlines, they also do not really affect me: I rarely change my flights once I make them, and I always book directly with the airline.

    My sister and brother-in-law flew Frontier the other day. She booked through Orbitz. But they just check bags, which apparently are free for them since he’s in the military, and they don’t do carry-ons beyond her purse.

    So I guess the solution for most of us is to game the system where you can.

  8. What needs to happen is a revised legislation to make the playing field equal. When an airline changes your ticket they need to pay the same amount, canceled flights, dropped destinations, late arrivals causing missed connections etc. Unfortunately we do not have a contract of carriage for them to accept. Maybe if a major credit card company would put it into there rules and that if an airline (or other transport) accepted the CC they would be bound to the terms just like the consumer is bound when they fly, things might change. Till then its flier beware

    After all the changes, fees etc. many truly frequent fliers loyal to none Airline don’t see the fee s that are leveled.. On UA I still can check 2 70 lb bags, get a live person on the phone, etc. Also as a Club member I have a nice place to wait, free drinks and snacks etc. Yes it costs but the other option is the Southwest/Frontier route. No frills, no waiting in the club, not many nonstops to my destination. Yes I fly West coast to East coast or Midwest a lot so that is why it works. Major city to major city. And I use my mileage points promptly, No saving for 10 years to get the trip of a lifetime only to have the award level raised (or miles lost due to inactivity) A frequent flier knows the rules.

    Once in awhile the world does fall apart due to weather as our Governor , Jerry Brown says, stuff happens. If it happens to often time to change airlines, vote with my wallet.

  9. Chris, have you done any comparative ticket pricing to determine whether because of increased change fees and other add-on charges, it now makes sense to buy a full-fare coach ticket versus a non-refundable discounted ticket, or even a First-Class ticket on some routes?

    1. No, but that’s a good idea. Something tells me it wouldn’t make sense. Most unrestricted economy class tickets cost between two and four times more than a discounted ticket, which still makes them out of reach for a majority of leisure travelers.

      1. That’s actually the analysis that some business travelers do. When traveling last minute, the restricted economy fare might be minimally cheaper then a fully refundable/changeable fare.

        1. Some people think they are doing this analysis, but actually fail to do it properly. Most people forget to properly calculate the number of times they change their ticket, or put another way, the chance that they need to change any particular ticket. Suppose a discount ticket costs $200 and a full-fare ticket $800. Even if you have to give up that first ticket, and buy a higher fare discount ticket at $400 (because the $200 fare is now no longer available), you still saved $200 versus the full fare. And there are probably other trips when you don’t need to change anything, and the $200 fare saves you a total of $600. Even in the rare case when a single trip ends up costing more than $800 due to changes, it almost always balances against other trips where the discount ticket didn’t have to be changed.

  10. I fly only Jetblue and Southwest now, and it doesn’t look like this is going to change anytime soon. For that poor person feeling trapped by United elite status: Jetblue’s airplane setup is nearly as comfortable as United’s Economy Plus for folks under 6 feet tall, and no status is needed to get that.

  11. $200 to change a ticket?

    What this change fee hike WILL do is discourage people from cancelling non-refundable tickets. If I know that the ticket I’m holding is worthless, whether I cancel it or not, what is my incentive to spend my precious time on the phone cancelling that ticket? Answer: none. I’m not going to waste my time cancelling that ticket to do the airline a favor. I’ll just be a no show. It’s kind of a turnabout of “no waivers, no favors”.

    Now the airline may get some value out of that seat by giving it to a standby customer, but that isn’t anywhere near the money they’d get re-selling that seat a day or two before the flight. And you know what, I see no reason why I should care.

    1. I agree
      If I cancel a nonrefundable ticket its lost forever. There might be a chance that if my plans change again, I’ll need the ticket. It benefits me ZIP to call to cancel a nonrefundable ticket. Let me no-show and be done with it.

      1. Just keep in mind that if you no-show for the first segment of a round-trip ticket (or other multiple-segment trip), the airline can cancel the rest of your segments. So that’s a reason to call to cancel, even if you don’t seek any money back out of the transaction.

        1. What’s the difference? Either you call and cancel ahead of time (and it cancels the entire ticket, not just one segment) or the airline does it when you no-show. Still the same results to you – no ticket and no refund.

    2. @Cybrsk8r:disqus I agree to you to a certain extent but let’s all be honest that that isn’t how it’s going to play out in reality.

      You really aren’t going to hurt the airline by “no showing.” First, you already paid for the ticket so that’s revenue in the pocket. Second, and more importantly, when the number of no shows goes up, as you say it will, the airline will simply increase the number of seats it overbooks a flight by so they still get the added revenue you think they are going to miss out on. Chris has dealt extensively on why that is a bad thing for consumers so I won’t repeat that here.

      Lets face it. Its never the guys that purchased the expensive last minute ticket standing at the gate without a seat when the plane pulls back. Its always the little guy. That’s why you should care in the long run….

      1. “the airline will simply increase the number of seats it overbooks a flight by so they still get the added revenue you think they are going to miss out on”

        And if those poeple do show up, then the airline will have to pay those people to be bumped, or deny them boarding and have to cough up even more money.

  12. airlines is the USA have never been a good investment. Their average returns on investment are awful.
    Although costs of labor in the USA are realtively low in the western world, especially when compared to Australia, it’s much more cost effective for customers to do everything online.
    That said, changes fees should remain at reasonable levels or the airlines will get more & more no shows, which leads to more & more overselling flights & the problems that brings about.
    Why on earth, would airlines have any refunds at all on any fares ?
    Seems a crazy notion while in Australia, virtually no fares that are actually sold these days are refundable in any way (except very expensive fares, which are hardly ever sold these days).
    There is a notion out there, that if can’t get the fare you want at time & day you want, then should be able to book anytime & change to waht you want for a small fee. This doesn’t make sense, as the reason fares are higher on some flights is demand is higher for that time/date.

  13. “Airline agents are often empowered to reduce or waive fees”…

    BWAHAHAHA! no, i’m not! please DO NOT give people that idea.

    on a personal note…i am sooooo tired of people trying to negotiate, cajole, guilt me into waiving fees, because they see lines like this. i am given a lot of leeway in my job, but fees like overweight baggage, excess baggage, flight changes, etc are NOT negotiable. part of my job is to follow my employer’s policies, and i will NOT jeopardize my job to waive someone’s fee just because they asked politely.

    1. Maybe another way of putting is that airline employees are empowered to find clauses or conditions in the policy that a particular person may be eligible for. For example, whether or not there is a “flat tire rule” that allows you to be rebooked on a later flight on the same day, without fee, if you show up late. A rude attitude can get you no service, while politeness means that you may be more inclined to inform the customer of some little-used provision. This isn’t saying that we expect you to violate policy.

  14. Personally, I’m glad they are chargeing for carry on items. Airlines make us game the system, and ever since the free checked baggage went away, passengers have tried bringing more and more on the plane, to the point most people have to check bags at the gate. If passengers are going to have to pay for a small bag as a carry on or the same to check a later bag, it means less baggage in the cabin, and I will be able to keep my expensive electronics with me on the plane.

    1. Exactly, I don’t know why more people don’t understand this. The charge should be the same for the same luggage, regardless of where it’s carried. After all it takes the same amount of fuel regardless, and the “gate checking” causes delays and hassles. Why shouldn’t airlines provide incentive for larger luggage to go in the cargo hold, which after all is what it’s designed for!

    2. I would have no problem with a charge for carry on as long as they stop charging for checked baggage. If I have to pay either way, I am still going to go with carry-on so I don’t have to send it through the hidden TSA search where who knows what will disappear (yes, I know it can happen in the security checkpoint, but I personally feel that it is more likely to happen when there is no one watching them), or deal with waiting at the luggage area to pick it up.

    3. Entitled much? Why are your electronics more important than what anybody else brings on?

      But hey, you’ve found the solution! More and more fees, instead of not charging so damn much for luggage in the first place and causing people to try and carry on more!

      1. My electronics, laptops, tablets, iPods, cameras, mobile phones, in addition too jewelry, medication and other valuables belong in the cabin with the passenger not the family clothing, shoes, books, beach balls, etc, which more and more passenger are bringing into the cabin. Last week I was flying from DEN to LAX on my way to NRT and a woman was trying to bring a beach bag into the cabin as her “purse” which she argued was her personal item.

        1. You don’t need electronics, laptops, tablets, iPods, cameras, mobile phones, or jewelry at all on a vacation. You CHOOSE to take those items, so why should the airline care?

          1. Who said he was on a vacation? What if he was traveling for work? Or what about the people who have medical equipment they need? I sure as hell wouldn’t check anything like that and insist on carry-on because of the importance.

          2. Oh. Let’s not also forget that the airlines will not assume responsibility for electronics in checked baggage so that means you have to bring it on. You would really put your laptop, table, ipod, camera, mobile phone in checked in luggage? I bet the TSA baggage screens love your bags.

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