Posted by: Five Star Travel & Cruises | August 19, 2010

Rising Airline Fees – AGAIN

Not sure what fees are covered by your airline fare? You’re not alone!  It was just recently that many airlines announced new fees, and they are at it again. New fees, part of a practice dubbed “unbundling,” include peak travel surcharges, fees for standby, early boarding, and seat assignment, many sneakily hidden in the overall fare.

 The Department of Transportation estimated that now airlines present passengers with more than 100 additional fee options. What does the traveler need to know before booking an airline ticket?

One of the newest fees  is Spirit Airline’s controversial charge for overhead carry-ons. This prompted the advocacy group to demand that Congress ban such practices permanently. What this will mean for consumers? Spirit is currently the only airline to add this fee, but their self-proclaimed  ‘ultra low fares’ will wind up costing more in the end than its competitors. This makes it even more important to use a knowledgable travel agent to help you navigate through all the fees. 

Spirit’s official announcement stated the policy would “improve inflight safety and efficiency by speeding up the boarding and deplaning process.” Ben Baldanza, Spirit President and CEO, testified before the House Transportation and Infrastructure Subcommittee on Aviation in July 2010 that the airline had reduced base fares when it led the checked-bag charge in 2007, then again just recently to offset carry-on fees. “Carry-on bags have become a nightmare for passenger boarding and deplaning,” Baldanza argued. “Significantly, last March the Association of Flight Attendants reported that 80 percent of flight attendants had been injured during the last year by moving carry-on bags in and out of overhead bins.” Does this argument have merit in the wake of the recent Jetblue incident?  “Maybe, just maybe, Spirit Airlines doesn’t look so stupid,” says AirfareWatchdog president George Hobica. “Modern jetliners were not designed to accommodate every last passenger’s carry-on bag, especially since flight attendants are not policing the size of these bags.”

While no other airlines currently have plans to implement carry-on fees , they are getting crafty with their add-ons, some of which you may not ever  notice. Take the Peak-Travel Surcharge, for instance. Never heard of it? You may have already paid it. Holiday and summer fares are notoriously expensive, but they are even higher now that airlines such as American, Continental, Delta, United, and US Airways are adding between $10 (for mid-week summer flights) and $30 (for the Sunday of Thanksgiving weekend) to each leg. Delta was even so bold as to add a $50 surcharge to one-way flights on the day after the Super Bowl. And unlike fees for baggage or blankets, these surcharges are folded into the fare, making them undetectable. These practices make it even more difficult for consumers to be aware of what they are actually already paying for and what is an additional fee.

Some airlines are still resisting tacking on fee after fee. During July’s Congressional hearing, Southwest executive Dave Ridley saw a correlation between Southwest’s commitment to “affordable, transparent, and easy-to-understand pricing structure and low fares with no hidden fees” and “a domestic market share shift worth close to a billion dollars” since the introduction of the “Bags Fly Free” advertising campaign. He added that another benefit is increased overhead space, unlike other airlines whose policies “‘incentivized’ customers to carry their bags onboard rather than pay bag fees.”

Southwest also does not charge an extra fee if you want to go standby, another trendy new add-on that airlines have started implementing. The majority of other carriers now charge $50 if you want to take an earlier flight than you are scheduled for. American gives you the option to bypass the standby charge — if you want to pay another fee instead. Their new Your Choice “boarding and flexibility” package, which costs between $9 and $19 and is available on some of their most popular routes, provides early boarding, free standby, and a $75 discount on flight changes.

“The ancillary fees are not going away,” says CEO Chris Cuddy. “[They] can generate 20 percent or more of an airline’s revenues at high profit margins, quite simply helping the airlines stay financially aloft.” A recently published Consumer Travel Alliance analysis, focusing on four popular routes taken by millions of travelers found that a typical traveler requesting just two ancillary fees (extra legroom and one checked bag) would pay an average of 26 percent more than the ticket base price shown on the website. A traveler checking two bags would pay 54 percent more, the actual increase ranging from 21 to 153 percent. And this has translated into big money for the airlines. The Bureau of Transportation Statistics reports that in 2009 U.S. airlines collected $7.8 billion in ancillary fee revenue, including $2.7 billion in baggage fees alone (up from $1.1 billion in 2008). Another $2.4 billion was made from reservation change fees. In the first quarter of 2010 alone, domestic carriers toted up $769 million in baggage fee revenue and a staggering $554 million from skyrocketing reservation change fees. 

What the government can and can not do to protect consumers from out of control pricing is up in the air. Various rulings mandate that some fees (fuel surcharges, peak travel and holiday surcharges, government taxes, and, as of May 2008, checked baggage policies) be disclosed in advertisements and during telephone and counter sales. Robert S. Rivkin, DOT’s General Counsel, stated that’s no longer sufficient. “We believe that the proliferation of these fees and the manner in which they are presented to the traveling public can be confusing and in some cases misleading,” says Rivkin. “The published fare used by many consumers… does not clearly represent the actual cost of travel.” The DOT may also require carriers to provide up-to-date, comprehensive fee information to Internet websites that sell airline tickets and to travel agents, having estimated that at least half of all airline tickets in the United States are sold by travel agencies.

The knowledgable travel agents at Five Star Travel and Cruises are happy to help you navigate through the airline charges/fees to help you make the most informed decision you can when purchasing air travel. Give us a call today!

Please contact Five Star Travel and Cruises for all your travel needs.


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