Navigating Air Travel's New Reality
Even as fuel prices continued to drop in October, most insiders were predicting domestic fares would still increase by at least 5 percent, and that's not taking into account the new fees, which are spreading like kudzu. Even if fuel costs don't return to their late-summer peak, analysts say, carriers aren't likely to repeal any of the fees, fare increases, or other changes instituted in response to the spike in oil prices: This is the best shot they've had in years to turn a solid profit, and they're intent on making that happen now. "Even in good times carriers barely make money," says analyst Derchin. Added fees are helping to make up the difference, and many airline executives now see a certain logic to the à la carte philosophy that many upstarts have championed for years. American's Garton likens it to buying a ticket to a football game or a concert: "When you go to a stadium, your ticket gets you a seat—that's it. You want a hot dog? You pay for it." (Passengers got their first taste of à la carte pricing in the early eighties, when the original low-fare carrier, People Express, sold sandwiches and sodas off a cart and charged for checked bags; in exchange, consumers got to fly across the country for $99.) The airlines' creativity in extracting money from passengers appears to know no bounds: Jet-Blue recently began selling pillows and blankets for $7 a "kit," then tried to put a positive spin on it by pointing out that the fresh bedding would be more hygienic than what you used to get for free—hardly a reassuring thought. But the tactics are working, and some airlines estimate that the new à la carte pricing will generate an additional $100 million a year. This shift, however, has also generated ill will. For instance, when USAirways started charging $2 for small bottles of water, many fliers protested that the airline was carrying frugality too far, given the TSA's ban on liquids and the lack of potable water on planes. And when United proposed charging $10 or more for meals on longer international flights, customers bombarded the carrier with so many complaints that it quickly backed off.
The charges have also sowed a lot of confusion. For example, most airlines—with the exception of Southwest and Spirit—now make passengers pay for the privilege of speaking to a reservations agent in lieu of booking their own flight online, with fees ranging from $10 to up to $25 for a domestic reservation. Nearly all carriers make you pay to check a second bag, but you'll have to pay $15 for the first one, too, on American, Continental, United, US Airways, Frontier, and Hawaiian Air. United recently joined Delta in assessing a whopping $50 for the second bag per flight, although Delta at press time was still not charging for the first. During a recent speech to a travel industry audience, Delta CEO Richard Anderson was unapologetic about the new approach: "We are not an overnight express company.…When you get people bringing bicycles and the myriad of other stuff they want to travel with, then we are turning into a cargo carrier." He may have a point: Luggage is one area where the connection between the airlines' costs and yours is fairly easy to grasp. But other fees are harder to explain, such as the very steep price to change your nonrefundable ticket—now $150 with most major carriers, up from $50 a few years ago, for what is, in essence, a few keystrokes on a reservations computer. The airlines defend that practice as a way to discourage travelers from making a lot of flight changes (except for Southwest, which typically doesn't charge at all).
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