29 January 2013

End of airline fees?

Brad Tuttle has a Time article about the airlines:
For years, airlines have rolled out new fees to foist onto passengers like clockwork; American Airlines and Southwest Airlines as the two latest examples. There is somewhat of a silver lining, though: with every new fee added, it becomes harder for airlines to come up with new things to charge for.
Around the globe, airlines charged an estimated $36 billion in ancillary fees last year; “ancillary” being the industry term for anything above the base flight cost, including charges for baggage, meals, seat reservations, and so forth. The $36 billion figure represents an increase of eleven percent globally compared to the 2011 total. In North America, the fee total paid by passengers rose “just” around five percent. Compared to the fee increase from 2010 to 2011— roughly fifty percent globally— last year’s hike in fees almost comes as a relief. What’s more, there’s been sign that American flier are paying slightly fewer baggage fees as more passengers grow accustomed to packing less and flying only with carry-on luggage.
Of course, just because the overall pace at which fees are rising has decreased doesn’t mean that airlines are falling out of love with them. What it appears to mean, though, is that carriers are slowly but surely running out of ideas for new fees to pass along to their customers.
This seems to be the case for the nation’s most fee-crazed carrier, Spirit Airlines. By one estimate, the average Spirit passenger pays an extra $103 in fees for every round trip with the airline. And that estimate was announced in mid-2012, before (of course) Spirit bumped up the cost of a few of its fees. For every three dollars collected by Spirit, only two dollars comes as a result of payment for flights; the other one-third of total revenues comes from Spirit customers paying for fees including carry-on luggage, seat assignments, bottled water, and more.
But in an interview with American Public Media Marketplace, Spirit CEO Ben Baldanza said that “we probably are almost at the limit of” adding new fees. “Our fares pretty much include the right to get on the plane and get off at the other end, to have a safe and on-time flight and that’s pretty much it. So there’s not really much else we can take out of that.” Baldanza, whose airline is the subject of a popular boycott campaign on Facebook due to its fee-happy ways, defended the company’s reputation as the “dollar store of the sky” by explaining “we do things a little bit differently”:
“What we do is we strip out all of the things that can be a decision point for the customer — like whether you take bags or not, or if you want to pick where you sit on the plane, or whether you’re going to eat on the plane or not.”
(MORE: Airline Already Collecting the Most Passenger Fees Wants $1 Billion More Annually)
At long last, it appears as if there’s little or nothing left to strip out. To which travelers might respond with a gigantic Wheewwwww! It’s about time.
Except we all know that this is probably not true. Creative ideas for new airlines fees will continue to be floated—charging to get off the plane first, for instance, or hiking airfares after purchase due to fuel cost increases—and if Spirit and other carriers think they can make money by passing such charges along to customers, you can bet they’ll do just that. You can also bet that the costs of checked luggage, seat reservations, and other services we pay for right now will only grow more expensive going forward. So even if there aren’t new fees, we’ll probably be paying more in fees.

Rico says remind him not to fly Spirit, and to bitch if Southwest adds bag fees. But Tuttle has a further article about what they're actually doing:

Et tu, Southwest? A relative absence of fees and an overall nonelitist, democratic approach to airline travel are among the reasons Southwest Airlines has been so successful. A new fee— forty dollars to be among the first on the plane— could cancel out some of the goodwill built up by the carrier over the years.
By now, flyers probably shouldn’t be surprised by any new airline fee. These fees hit a record high last year (after hitting a record high the year before that), and what with the regular release of new fees— excuse me, “enhancements,” to use American AirlinesBig Brother–like marketing lingo— it’s likely even more fees will be collected by carriers this year.
Even so, the perception has been that Southwest Airlines was different. While nearly every carrier has added fees for checked baggage (and sometimes for carry-on luggage as well), Southwest has pumped up its complimentary service with a ubiquitous Bags Fly Free ad campaign. The airline’s generous baggage policies have regularly helped put Southwest among the top customer-rated airlines in the US.
Southwest’s approach to seating has also set it apart from the crowd. Southwest doesn’t have reserved seating. Instead, passengers pick out seats when they board, according to a specified boarding order. Some flyers love the system; for others, it drives them batty with anxiety that they’ll be stuck in the worst seat on the plane. Love or hate the system, though, most found it to be (mostly) democratic and (mostly) fair— and at least more reasonable than the airlines adding fees for seat reservations.
Slowly, however, Southwest seems to be embracing the approach of other airlines, in that clearly better service goes to customers who pay for it. For years, Southwest has offered an Early Bird Check-in: for ten dollars each way, passengers were ensured they’d be in the first or second boarding group, meaning they would have a decent selection of empty seats to choose from. Now Southwest is adding another tier for boarding privileges. The airline once celebrated for selling flights for $40 (and sometimes less than that) just launched a $40 fee for passengers who want to be guaranteed they’ll be in the first boarding group. Customers can pay the fee 45 minutes before the flight, if the section isn’t already sold out.
Many frequent flyers aren’t happy with the new fee. At SmarterTravel, travel-rewards expert Tim Winship wrote:
There’s no benchmark against which the new fee can be measured and evaluated, but charging $40 just to get an earlier start in Southwest’s first-come-first-served boarding scrum seems cruelly unreasonable. That assessment will be reality-tested as travelers vote with their wallets.
On the one hand, the new fee should seem like no big deal. No one is forcing passengers to pay it. Anyone who doesn’t think it’s worth the cost can elect to skip it. On the other hand, what this and most airline fees essentially do is screw over travelers who don’t pay up. The introduction of fees for basic services and perks that used to be free obviously decreases the likelihood of travelers getting those basic services and perks for free anymore. Passengers who don’t pay can expect worse treatment, as simple services— like getting a fair shot at a decent seat on the plane— are now viewed as revenue streams, as perks saved for the elite.
Rico says that he gets on early anyway, what with his disability, so this, fortunately, doesn't apply to him... (And what's the big deal with getting on first anyway? It's not like it really matters.)

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