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Airlines try fees instead of higher fares

Marketplace Staff Jun 6, 2008

Airlines try fees instead of higher fares

Marketplace Staff Jun 6, 2008


Tess Vigeland: At the top of the show, we mentioned all those airlines that are pointing workers to the exits — just one element of their effort to stop the red ink.

Another element? Raise prices for passengers. The Web site bestfares.com found that airfares on some nonstop routes cost 365 percent more than they did at this time last year. That doesn’t even count all the new fees they’re tacking on.

Wall Street Journal travel columnist Scott McCartney joins us and Scott, we’re heard about the baggage fees. What else can customers expect?

Scott McCartney: It pretty much runs the gamut, particularly at American now. Anything that they could raise or charge you for, they’re doing it. The fee to put an unaccompanied minor on an airplane, something people do in the summer when they send kids off to summer camp, that’s gone from $75 up to $100. The fee to take a pet in the cabin with you: $100 up from $80. If you want to redeem your frequent flier miles for a “free ticket,” there’s now a $5 fee for online booking. Some of the fees that are going to hit people more than they realize are the fee for changing a ticket has gone up to $150 at American and United from $100. You could have a $300 ticket and by the time you’re done, you’re going to run into fees that may exceed the price of the ticket.

Vigeland: Is it possible to figure out not only what your fare is going to be, but what all these various fees are going to be. I mean, you don’t get that, say, from Expedia, do you?

McCartney: No, you don’t. You really have to get into the fine print of the airline fee structure and contract of carriage. It’s really not simple at all to do. Some of the booking fees you’ll get up front if you’re on the phone with an agent or you’re booking online and there’s a fee associated with that, but you don’t know what kind of baggage fees you’re going to face unless you weigh your baggage, count your baggage, make sure it’s not oversized. And even some of the baggage rules… there are a host of rules at airlines for unusual items — scuba gear, surfboards. There’s a lot of chuckling that went on when Frontier Airlines out in Denver recently raised the fee for transporting antlers. Hunters bring their antlers.

Vigeland: Are we simply in an era where you should expect nothing but getting from point A to point B?

McCartney: You know, it’s a fascinating question: What do you get when you buy an airline ticket? You get transportation. We’re going to get you from point A to point B, maybe not on time, maybe not with your baggage, but that’s what you get with a ticket. Basically, it’s a la carte. It’s not all that dissimilar from going to a movie theater. What you get with your $10 for your movie ticket is a seat in the movie theater. If you want popcorn or soda or anything else, it’s extra, and that’s where airlines are headed.

Vigeland: How much of this is a psychological game with passengers? Instead of charging me an extra $25 for my pet, why not just raise the airfare?

McCartney: There is a psychological aspect to it in terms of buying tickets. Customers are very price sensitive when you look at what the ticket price is online, a lot less sensitive to the fees and things that may come later. The problems that airlines face right now is that fuel costs have gone up 66 percent so far this year. They’ve only been able to raise fares through April 6 percent domestically. If they push fares up to the level that they would have to to cover the rise in fuel costs, people would stop buying tickets. But the other thing that’s going on, I think, is that airlines have been surprised at how customers have adapted to fees. It started when they took away food. Lo and behold, people adjusted to that, and now, let’s just do what we can and keep fares as low as we can so we get people still coming out to the airport.

Vigeland: Scott McCartney writes the Middle Seat column for The Wall Street Journal and as always, we hope and pray that he doesn’t spend too much time there. Do you?

McCartney: I do, every now and then, yes. Builds character.

Vigeland: Thanks so much for joining us.

McCartney: Good to be with you.

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