Struggling Airlines Pin More Fees on Passengers
Figuring out the cost of his parents' recent trip between Dallas and Southern California was "a nightmare" for frequent flier Thomas McDonnell.
Comparing airline baggage fees and other extra charges was so difficult that McDonnell had trouble determining the most economical flight. "It was so complicated that driving became a strong option," says McDonnell, of Austin.
McDonnell's frustration is shared by many fliers who are confronted with an ever-expanding array of fees for services that once were included in the price of an airline ticket. They complain the charges aren't transparent, are misleading and even a rip-off - so much so that William Maloney, president of the American Society of Travel Agents, says Congress may need to force greater disclosure.
"There's an increasing feeling among consumers that they're being taken advantage of," Maloney says. "Consumers have more rights when they buy a hammer at a hardware store than when they buy a $1,000 airline ticket."
But the fees - what airlines call a la carte pricing - aren't going away. More airlines are imposing or expanding them to offset big losses in revenue as fewer people fly during down economic times, and fuel prices are again on the rise. Even Southwest Airlines, a longtime opponent of extra charges, announced new ones last month.
The airlines justify fees as letting customers choose the level of service they're willing to pay for and say passengers are getting used to them. And ultimately, as aviation consultant Michael Boyd says, "It's business, and they (airlines) have the right to charge for whatever they want."
Sorting out the airlines' fees can be a time-consuming task.
It took a week for a USA TODAY reporter - who, unlike most consumers, was assisted by airline public relations staff - to compile 28 different types of fees charged by 14 major airlines. (The information can be found in its entirety at USATODAY.com.)
Even professional travel agents such as Maloney's members and big companies with travel departments have trouble sorting through them.
"Budgeting travel costs becomes difficult without knowing the full price employees will spend on air travel," says Kevin Maguire, president and CEO of the National Business Travel Association, which represents more than 4,000 travel managers and suppliers.
When the group surveyed corporate travel managers on the issue of fees last fall, 76 percent of 230 who responded said airlines were misleading the public.
Some fees are 'absolutely crazy'
Excluding yearly membership fees to use airport lounges - which cost $525 at United Airlines - the most expensive fees that airlines impose are for international ticket changes and overweight bags.
Delta Air Lines, American Airlines and US Airways, for example, charge $250 apiece, or $1,000 for a family of four, to change an international ticket between some destinations. United charges $400 for a bag weighing 71 to 100 pounds on flights to Africa, the Middle East and some Pacific destinations.
But it's often the little charges that can be most infuriating for many passengers.
Frequent flier Scott Jozefowski says some fees are "absolutely crazy," including one he saw invoked on a US Airways flight in April.
When the woman sitting next to him was cold and asked for a blanket, Jozefowski says, the flight attendant told her she could buy it. US Airways charges $7 for a pillow and blanket set. The woman dodged the charge, he says, by persuading the attendant to lower the air conditioning.
More irksome, Jozefowski says, was the $3 he was charged for a 4-ounce bag of trail mix on a Northwest Airlines flight to Hawaii last year.
"Everyone on that plane paid $400 or more for that flight, and the airline couldn't even give us peanuts," says Jozefowski, an education consultant in Purchase, N.Y.
That's since been remedied. Delta acquired Northwest in October and has restored free snacks, including peanuts, on Northwest flights, says Delta spokesman Kent Landers.
McDonnell, the frequent flier from Austin, finds booking fees the most irritating. Most airlines charge a fee to passengers who book a ticket - even a free frequent-flier ticket - on the telephone instead of online.
"It seems moronic to pay a representative of the business when I am trying to spend money," McDonnell says.
But the airlines need the money that the fees generate during down economic times when people are traveling less. The fees produce substantial revenue.
AirTran expects to generate $300 million this year from fees for checked bags, ticket changes, business-class upgrades, alcoholic beverages, Wi-Fi and other services.
United Airlines said last year it expected to annually collect $275 million from fees for the first two bags that passengers check on its flights.
In April, US Airways said its "à la carte revenue initiatives" have brought in more than $255 million since they were initiated in May 2008. They're expected to bring in $400 million to $500 million this year.
"Our a la carte business model is a necessary way to generate revenue during a time when capacity exceeds demand," says US Airways spokeswoman Valerie Wunder.
Airlines began imposing the fees last year to help offset what then were record-high fuel costs. Although many of the fuel surcharges airlines imposed then have since come off, other fees have remained and been expanded.
Last month, Delta scaled back its plans for a $50 fee for a second checked bag on all international flights. When competitors didn't adopt a similar policy, the airline said the fee, to begin July 1, would apply only to travel between the United States and Europe.
But that's a rarity. Boyd, the airline consultant, says travelers shouldn't expect fees to disappear. "Fees," he says, "are a way of life now."
Paying for what you use
Some airline industry experts, such as Ohio State University's Nawal Taneja, say the airlines are damaging themselves by slapping on so many fees. They're alienating passengers, he says.
"Airlines are doing strategic moves that passengers are not accepting," Taneja says, and "the elastic is about to break."
Taneja, a business strategist who has written five books about the airline industry, says airlines should only charge extra for products and services that cost them money, and the fees must be reasonable.
"Airlines must do it in a manner that gets them money but is not offensive to the customer or destroys their image or brand," Taneja says. "A $250 change fee for a free frequent-flier ticket is unreasonable."
Others agree with his assessment. Consumer advocate Brandon Macsata also says the fees are driving away customers. Those most affected are seniors on fixed incomes, college students and lower-income families, he says.
"Marketing economics 101 dictates that higher fees equates to fewer customers," says Macsata, executive director of the Association for Airline Passenger Rights. "It doesn't matter whether it is a durable good at a retail store, food at a restaurant, automobiles at a car dealership, or excessive airline fees for everything under the sun - they restrict markets, not grow them."
The airlines clearly don't buy that argument.
Las Vegas-based Allegiant Air and European discount carrier Ryanair - which recently confirmed plans to charge to use the toilet - "successfully charge separately for most customer services without great criticism," says David Castelveter, vice president of the Air Transport Association, which represents U.S. airlines.
"Is hotel demand down because hotels charge extra for items in the minibar and Internet connections?" he asks. "What about a la carte at the movies, opera or ballpark?"
Christopher White, spokesman for AirTran Airways, says the airline is seeing a change in passenger behavior, with customers beginning to "embrace à la carte pricing."
Passengers like paying only for services they use, White says. And without à la carte pricing, he says, AirTran wouldn't be able to offer the $39 one-way fares it offers on some routes.