United sells a subscription

June 6, 2013 on 1:41 pm | In Airline Fees | 2 Comments

United Airlines would be considered a big player in the ancillary fee department of airlines in the United States.  They had really 4 classes of service, for instance, long before most when they adopted Economy Plus.  Most recently, they became national news for their decision to raise already high ticket change fees another $50.

If there are going to be fees, I hope more airlines also take United’s approach to offering some value in the process.  United is now offering subscription plans that would either allow a passengers to routinely check bags for a year without additional fees or another plan that would permit travel in Economy Plus for a year without additional fees.

United isn’t just offering one plan either.  Checked baggage subscription plans offering opportunities to carry one or two bags and also offer the opportunity through widened regions.  Their simplest plan (1 bag) in the domestic United States is just $349 and one of their most expensive, two bags checked globally, is $799.

There is value in those fees for the frequent traveler.

Economy Plus works similarly.  For a base fee, the traveler would be able to access Economy Plus on a space available basis for $499.  It’s $599 if we add in Hawaii and/or Alaska.  For global access, it is $699.

But remember that that is on a space available basis and space available comes after top tier elites in that area.  There may be value here or may not be.

What’s the catch?  Well, top tier frequent travelers already get access to these things and this is really aimed towards the frequent flier that is traveling just a few times a year.  It fits a niche.

If fees aren’t going away, programs like these are good values for those who travel more than very occasionally and other airlines would be smart to emulate them.

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Fees for Southwest

May 15, 2013 on 12:50 pm | In Airline Fees | No Comments

Southwest, as a function of owning Airtran, has tasted the allure of fees and saw its revenues increase 6x most recently in earning more than $176million in fees for 2012.  Most of that was from bag fees collected by Airtran.

A very small portion was Southwest related (they do charge for bags, just not the first few bags).

I think we now know what the temptation is.  Someone at Southwest did the math on their customers and realized that number could climb 6x more if they adopted it system wide.

The question asked is “Yes, but at what cost?”

It’s hard to say with Southwest.  Their extremely loyal customer base might be far more likely to punish Southwest than some other airlines’ customers would.

I think we’ll see more dialog about the chance of fees at Southwest and we may even see Southwest adjust itself somewhat in the landscape of fees.  Frankly, I think you could make an argument at Southwest that introducing modest baggage fees for 2 or more checked bags.  It aligns Southwest against its competitors better while still delivering exeptional value to almost all who fly them.

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Change Fees Still Changing

May 4, 2013 on 1:26 pm | In Airline Fees | No Comments

Delta and American Airlines have matched US Airways and United Airlines with $200 domestic change fees for those who want to change their tickets.

We think this is a mistake on the part of all these airlines and an opportunity for non-traditional, non-network carriers.  What’s the opportunity?  The chance to court some business travelers.

We tend to think of the business traveler as this road warrior who is traveling by airline 4 days per week and . . . not so much.  The real business traveler travels barely enough to get real status in a frequent flier program and usually their status is so long that they do not get the upgrades they hope and pray for.

In fact, for most of those business travelers, it’s a back of the bus experience over and over again.

Southwest and JetBlue and others such as Alaska Airlines now have a greater opportunity to court businesses and their traveling employees by pointing out a lower “all in” cost to get where they need to go.

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US Airways matches United

April 25, 2013 on 12:14 pm | In Airline Fees | No Comments

US Airways has announced it will match United Airlines’ increase of $50 on ticket change fees. I find this unsurprising since US Airways tends to be very opportunistic with fees.  In fact, I would regard US Airways as the leader in developing fees and arguably one of the most successful airlines in implementing them.

Will this mean that American Airlines will adopt such a thing?  No, not necessarily.  Once the two airlines blend together, the analysis will ultimately be based on what’s best given the combined customers the new airline has.

 

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Changing Change Fees

April 22, 2013 on 4:39 pm | In Airline Fees | 4 Comments

There is quite a bit of talk about United’s sudden increase in change fees which see a rise from $150 to $200 for domestic flights.  Most see this as overreaching and they’re not wrong.

If we accept that we’ve entered the Era of the Fee in the airline industry (and I do), then we have to accept that fees will be charged for a variety of things.  To a degree, I see fees as being something that can be OK but which the airline industry does very poorly.

Watching airlines implement fees for services is one of the most painful things I can do as an observer to this industry.

Change fees, like baggage fees, are inconsistently implemented and the rationale behind those implementations seems . . . without real reason.  United is now charging $200 to change a ticket.  Let’s be clear, if you have a $300 ticket, you can change it for $200 plus the difference in fares.  This essentially renders your ticket useless in all but extreme cases.

My question would be is a $200 change fee a revenue driver or a behavior driver?  I suspect the latter.  It’s there to drive people to not change and not create chaos.  Sometimes I wonder if airlines wouldn’t be happiest in taking people’s money and just not having them travel.  Often it seems as if the objective isn’t to deliver a service but, rather, part people from their money without delivering  value.

If we’re going to go to fee based systems, I’ll buy in on a change fee.  But why not simply have that fee cover the cost of the transaction plus some small penalty?  $50 for a domestic ticket change seesms both reasonable and appropriate.  $100 for international trips.  Make that change easy, not hard.  Let’s these changes happen fluidly and everything will work out in the end.

These change fees are, in my opinion, drive by overly complex fare structures among airlines.  Airline fares are so complex and so diverse that they make the airline believe that the opportunity costs of a seat are hundreds of dollars more than they really are.

People say that those change fees help defer the money that the airline lost in not being able to sell that seat in advance to someone else.  Well, did they lost that opportunity?  Part of that opportunity presupposes that all airplanes are full when they depart.  They are not.  They are nearly full and I’ll grant that it can be hard to fit standby people on but as for paying passengers who want to buy a ticket, you can almost buy that seat if you want it.  It just might cost you a small fortune when you buy it at the last minute.

The airline also doesn’t notice that the person who buys a ticket 2 months in advance has given money to the airline that it can benefit from economically for 2 months before it incurs the bulk of the costs associated with that purchase.

Why do airlines want to drive behavior with fees?  Because they hate saying no to a customer.  With an exorbitant fee, they can say yes but charge a fee.  The problem with that is it is assumed that the customer loves this and they don’t.

In fact, I believe its fees like change fees and baggage fees that breed some of the biggest contempt felt towards airlines.  Customers aren’t stupid and they do know when they’re being gouged.  They may not have a choice on that flight but they know they can exercise choice the next time and they will.  Think I’m wrong?  Just look at how things have gone for United Airlines when they inconvenienced their customers and abused their good will.  Bookings went down, revenues evaporated and everyone noticed real quick.

United’s fee is exorbitant and insulting.  Unfortunately, United also cannot measure the ill will generated by this and compared it to the revenue it gains.

If you don’t like it, then vote with your money.  And for what it is worth, more and more I think that American Airlines’ decision to allow a customer to “insure” themselves against change fees with . . . a fee is pretty smart.  I don’t hand out compliments to them very often but I think they are trying to package real value for the customer on that front and that is better than most airlines right now on the subject of change fees.

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Is someone sending the wrong message, sending a trial balloon or is crazy about to occur?

March 10, 2013 on 1:00 am | In Airline Fees, Airline News, Airline Service | No Comments

Several days ago, I wrote about new Southwest Airlines CFO Tammy Romo making comments about perhaps putting restrictions and/or fees onto the Wanna Get Away fares of Southwest.   Today, I was told that she also was asked at the JP Morgan Conference if Bags Fly Free was an essential part of Southwest’s brand and her answer was “no”.

I disagree vehemently.  Not only has it been an acknowledged huge revenue driver for Southwest Airlines, it is the component that keeps Southwest Airlines on the right side of “customer friendly” as a brand.

Get rid of this feature and you have just lost the ability to distinguish between Southwest and the other members of the Big 4 going forward.  And I think CEO Gary Kelly knows that.

So is CFO Tammy Romo going rogue in the attempts to drive policy and make a name for herself?   I might expect that of someone who was new(ish) to the company but Romo has 20 years with Southwest.

So is someone sending a trial balloon up to see how both customers and analysts react to the idea?  This isn’t really SWA’s style but I suppose anything is possible.

Or has crazy broken out at Southwest  Airlines and we’re about to witness the demise of greatness?

 

 

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Southwest to restrict Wanna Get Away Fares

March 5, 2013 on 1:00 am | In Airline Fees | No Comments

The Dallas Morning News Aviation Blog has a story about new Southwest Airlines CFO Tammy Romo indicating that Southwest would be looking to tighten up restrictions on the Wanna Get Away Fares that are Southwest’s most affordable.  This occurred at the JP Morgan Chase Transportation & Defense Conference and one questioner indicated his own experience with these fares and the fact that he was asked for no additional money to change a ticket.  Surprise was expressed that there was money being left on the table as he was ready to pay a change fee and found there was none.

Now we are getting into dangerous territory for SWA in my opinion.  First, while there is no “fee” to change a ticket, it’s often misunderstood that a change in the ticket results in no extra cost.  That’s not true.  The user has to pay the difference in fares and that often can be considerable.

Second, change fees for such tickets will never be a big revenue driver but they can be a huge discriminator when it comes to adding customers.  It’s like the bag fee thing only better.  If I were Southwest, I would advertise the hell out of this and drive more traffic my way.

Third, Southwest perhaps should look at every time it has in place today but that doesn’t mean it should change every item in place either.  Should Wanna Get Away Fares be restricted?  Probably to some degree.  I would say that charging a $25 fee to change a ticket would be of no real impact to Southwest but at the same time add incremental revenue where it would be appropriate to add incremental revenue.

But I would also be very careful of letting analysts drive my focus in these areas.  Analysts are paid to find anomalies in data and point them out.  They are not paid to quantify intangibles.  Southwest’s success is based a great deal on the intangibles that the airline offers and I would be very careful not to corrupt that perception.  Furthermore, just because a very well paid people earning considerable 6 figure salaries are willing to pay change fees does not mean the consumer of Southwest’s services is willing to pay these.

Southwest’s advantage is in delivering a high value experience.  Every fee is potentially an item that diminishes that value.

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Never Say Never

January 28, 2013 on 1:00 am | In Airline Fees | No Comments

Southwest Airlines CEO Gary Kelly made a statement in a TV interview where he said never say never when it comes to adding baggage fees at Southwest Airlines.

Before anyone over interprets:  He also said that there are no plans to do so in 2013.

He also said that he believed that Southwest’s customers would tell SWA if it wanted that unbundled fee added and he is absolutely right.  The customers will indicate to Southwest just how much of an unbundled carrier it wants it to be and that is as it should be.

It occurs to me that Southwest could soundly smack airlines such as Delta, American and United by lowering its fares and adding a baggage fee.  I doubt the revenue picture would change much at all on a per passenger basis but the fundamentally lower fares would put real pressure on the SuperLegacy airlines (with or without their lower costs.)  Why?  Because those carriers have a unique disadvantage against Southwest with respect to costs:  The SuperLegacy Airlines all incur the hub & spoke network costs that Southwest avoids.  And while Southwest pays some of the highest labor rates in the industry now, they also get the highest productivity in the industry as well.  That offsets those costs considerably.

Imagine you are American Airlines and Southwest lowers fares against you on the top 25 routes out of the DFW area and adds a baggage fee that is $5 cheaper than yours.  If I’m the AA CEO, I reach for the Tums.

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AA’s new fare structure

January 6, 2013 on 1:00 am | In Airline Fees | No Comments

A few weeks ago, American Airlines introduced a new fare structure and I recently had time to view AA’s fares and the structures on their website for travel between Portland, OR and Dallas, TX.

Airlines and particularly American Airlines, have tried to change how fares are priced before and generally with little success.  Other airlines are reluctant to engage in fare pricing structure changes that don’t give them parity or advantage against other airlines when it comes to bottom line price.

What American Airlines is doing is creating new fare structures that are based on bundled services they can sell individually.  These are not new fees, they are fare structures and it’s important to remember that.

I’m not a fan of the way fees have been introduced at most airlines over the past 5 years.  In some areas, I think the approach has been OK.  For instance, I think charging for food and alcohol in economy class was ultimately a wise move for two reasons:  First, food is one of those things that is taken whether it really is desired or not and that raises costs.  When you charge for it, you get only those who truly want it requesting it.  Second, by charging for the food, the airline can plan for a demand and not board too much food.  If you add more food to a flight than necessary, costs go up as a result of weight (yes, weight of that food does cost money in terms of fuel) and as a result of wastage.

I like charging for the advantage of boarding early.  It’s a fee that I’ve willingly paid on Southwest Airlines because I’m a tall, big man and having the advantage to get settled into a seat and make myself comfortable is worth money to me.

Charging for seat position is something I’m largely neutral on.  When the seat truly is an upgrade, I think charging for it is fine.  When you’re charging for exit aisle seats just because there is inherently a couple of inches of more legroom because it’s required, I don’t like it.

I do think that airlines need to address family needs with fees for boarding early and seat position.  I would suggest a reduced cost fee that covers families with 3 to 5 traveling.  When a family larger than 5 is traveling, they’ll often split up anyway.  3 to 5 allows two parents with a kid to get an optimum seating position for travel and as many as 2 parents and 3 kids can situate themselves optimally.

I hate baggage fees.  I think these are wrong on many levels and could be structured very differently with better results for all concerned.  First off, I think charging for any checked items is wrong.  Passengers are inherently traveling which means they must carry some luggage.  I think the first bag checked on any airline should be free.  I think that airlines should adhere to a strict policy of allowing a coat and one personal item to be carried onboard for free.  If you want to carry on additional luggage, it should be $30/bag.  If you want to check more than one bag, it should be $20 / bag.  Those who want the convenience and assurance of carrying on their luggage should pay considerably for it because it is a convenience.  Checked baggage isn’t a convenience, it’s a reality.

At first glance, I like what AA has done.  You can buy a base fare with no added services involved and conduct your travel just as you have been.  You can buy up and get a free checked bag, the ability to change your ticket without fee and priority boarding.  That’s a $68 increase in fare cost and is named Choice Essential.  Let’s break out the values of that:

  • The checked baggage each way we know is worth $50 ($25 / bag each way).
  • Group 1 priority boarding is probably worth about $10 if we use what Southwest charges for a similar opportunity.
  • If the first two items have a value of $60 total, then the “insurance” against the need to change your ticket is worth about $8.00 and that strikes me as about right for such a thing.

So is it worth it?  I actually think it is.  This is a fare that I would likely pay for most of my trips.  I really think this adds value appropriately and it’s a bundle structure that other airlines should consider emulating.

There is an $88 fare upgrade (Called Choice Plus) that offers same day flight change and a free premium beverage in addition to the already named advantages.   This bundle has potential for business travelers but I think that the real value in this is the opportunity to do a same day flight change.  For today’s business traveler, I’m not sure this is much value, however.

Today’s airline road warrior generally is able to change their ticket for different travel anyway.  Even if they aren’t, the costs accrue to their companies rather than themselves and that means a traveler isn’t inclined to be worried about those fees in many cases.  Furthermore, that same road warrior typically carries their briefcase/purse and a rollaboard onto the airplane so they can bypass the baggage claim at their destination.  (Longtime readers will know that I think this is silly behavior but let’s not digress.)  In addition, many frequent fliers have arrangements that already permit them one or more free checked bags.   So when it comes to Choice Plus, here is what I think your real values are:

  • Checked bag:  No real value (to most users)
  • Ability to change ticket:  $8.00 (we’ve valued this above already)
  • Group 1 priority boarding:  $10.00 (we’ve valued this above already)
  • Free Premium Beverage:  $8.00 (this could vary but that price is fair at the least.)
  • Same Day Flight Change:  $62.00 ($88 minus the above values of $26 equals $62)

I’m not feeling this “choice” as a big value.  Some business travelers might find it a value to be able to change their tickets and that value might go up depending on how AA treats its frequent fliers at various status levels going forward.

Bottom Line:  Choice Essentials feels like a pretty good bundle for both the business and casual traveler.  I like it on many levels.

I would like to see more bundling and I think fare bundling can work really well if airlines get their IT systems together to handle this.  It’s a good first start but I do think there are other opportunities out there to create more value bundles that work for more people.

 

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Frontier could have some game as an LCC

March 6, 2012 on 12:48 pm | In Airline Fees, Airline News | No Comments

It’s been said publicly by many that Frontier Airlines will be refocused on Denver again and that it will become an ULCC airline in the spirit of Spirit or Allegiant Airlines.  Many think this is difficult to imagine for Frontier and in some ways, I agree.  However, I think another ULCC isn’t such a bad idea.

The truth is that existing LCC carriers aren’t all that low cost any more.  Even the newest are raising fares right alongside the legacy airlines and that has significantly impacted the consumer and, I think, degraded demand.  Airlines are constricting capacity over and over and over again and while the rising fares do make up for that, it’s noticeable that every quarter we hear about an airline restricting growth or even contracting themselves in light of the market place.

I believe the reason we see Spirit and Allegiant doing as well as they do has a lot to do with the fact that they are the airlines who are able to stimulate and benefit from the incremental demand that appears with a lower air fare.  I’m referring to the Southwest effect, yes.  With the consolidation that has gone on for the past 6 years in this industry, I’ve wondered when new entrants were going to appear and I think the only reason they haven’t is due to the lack of available investment capital.   It’s hard to start a well funded airline right now.

But Frontier isn’t in need of that kind of capital.  Based in Denver, the airline could actually fight back against what are essentially 2 legacy airlines whose air fares are considerably higher today than they were 2 years ago.  There is money to be made there and money elsewhere too.

It requires lower costs and fees on everything, yes.  Frontier will need to add seats, reduce frills and start charging fees for anything it can find while lowering air fares dramatically.  This is real work but isn’t capital intensive work.  They can do this. 

Can they succeed?  I think that depends a great deal on the management team and its willingness to sharply execute a ULCC plan.  There is no need to take too long to implement the ULCC strategies.  Implement them and start undercutting your competition as fast as possible.  Move aggressively into markets where you can show a difference against the legacy carriers including Southwest Airlines.   It really isn’t as far fetched as it might seem at this point. 

The truth is that the airline marketplace has changed dramatically over the past 3 years as a result of the economy, fuel prices and consolidation.  Furthermore, most consumers have accepted the fee structures and despite hating them, they’re paying them.  So why not a ULCC that aggressively plays against the legacy airlines and older LCC carriers?  That model might not have been ready for prime time 5 years ago but a lot can change in 5 years.

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Spirit likes shooting itself in its own foot

February 3, 2012 on 1:00 am | In Airline Fees | 1 Comment

Spirit Airlines has added an “unintended consequences” fee to their airline tickets amounting to $2 / ticket fee because regulations now require airlines to permit changes to a schedule for up to 24 hours of booking without paying a penalty. 

It might highlight what Spirit doesn’t like about regulations but it is just punishing customers blatantly again and passing the blame off on politics.  The problem with that is that the public is more sophisticated than that and I question if Spirit isn’t just throwing a big temper tantrum in 2012.

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Taxes can hurt

October 31, 2011 on 1:00 am | In Airline Fees, Airline News | No Comments

Airlines are upset at new taxes and fees proposed in the United States and have protested them vigorously in public media and by even handing out barf bags urging people to contact their Congressmen.  Their main contention is that rising taxes will hurt demand and cripple their businesses.

They’ve also raised fares twice in the last 2 weeks.

No one ever said airlines were politically smart.

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Will air fares be lower in the fall and winter?

September 12, 2011 on 1:00 am | In Airline Fees, Travel Hints | No Comments

Will air fares be lower in the fall and winter?

It depends on what your standard is for low.  If you mean lower compared to this summer, yes, they probably will be a bit lower.  If you mean lower than last year, I think not.

Airlines continue to manage their capacity very closely and consolidation has brought more capacity management into play.  LCC carriers such as Southwest are not acting like rebels right now in that they’re joining most fare hikes quite willingly. 

I do expect some fare sales and I do think that some of those advertised fares will be incredibly low.  I also think that the number of seats available at those fares will be incredibly small.  They are the “door busters” of air fare sales.

Should you buy now?  I think you can hardly go wrong buying a ticket for holiday travel right now.  It’s possible that a lower fare might come along in a few instances but I think the probability of that is quite low. 

Expect seats on LCC carriers in the holiday season to be at a premium.  Particularly on airlines such as Southwest and jetBlue as their no baggage fees for a checked bag make travel for families much cheaper.  A family of 4 can save as much as $200 and that’s real money.

So, if I were looking for an inexpensive fare for holiday travel, I would buy now.  If I were hoping for a great fare for a whimsical trip, I might wait just a bit longer.  I do not think that we’ll see a plethora of low, low fares until after January 1st.

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Baggage Theft

September 2, 2011 on 11:36 am | In Airline Fees, Airline News | No Comments

Someone please explain to me why we are paying exorbitant “security taxes” as well as exorbitant baggage fees?

USA Today has a story about baggage theft by an American Eagle baggage handler and this gentleman managed quite a significant take. 

Let me point out that when you charge fees in the name of security, etc, then there is an obligation to protect people from these thefts.  In addition, IF THIS MAN CAN STEAL THIS KIND OF STUFF TO THIS LEVEL, ISN’T THAT A CREDIBLE SECURITY WHOLE AS WELL?

After all, he’s accessing baggage that is TSA processed.  If you can steal from a bag, you can put a bomb in a bag.  Food for thought.

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All Aboard

August 19, 2011 on 1:00 am | In Airline Fees, Airline Seating | No Comments

There have been several stories over the past few months about airlines once again playing with how they board people on flights in the hopes of speeding turning around flights.  Remember that if you can turn a plane around in 30 minutes vs one hour, you can literally change the profitability of that aircraft from bad to good for any one day.

Some airlines board from the back to the front and that was fairly common for a long time.  Others set groups that include people spread around in the passenger area which has been found to be “speediest” and then there is the SWA cattle call which has no assigned seating but which does prioritze boarding by group and with fees.

The typical load for a 2 hour flight in the US has roughly 140 passengers or more and for airlines offering two classes of service, I have a suggestion.  Board first class first and last (2 groups) and let them choose which they prefer to enjoy.  But here is the revolutionary in me:

Board economy class without assigned seating for any flights 3 hours or less.  The random nature of choosing your seat in that model lends itself to “spreading” the process out and there is a reason why it provides a faster turnaround for Southwest Airlines.  Put those in economy class into 3 boarding groups and just let the chips fly where they may but offer the opportunity to be in the first group for a fee.

Finally, board economy class with assigned seating for flights over 3 hours in duration and randonmize each group in economy class seating. 

There.  I’ve started the fire, go ahead, fan the flames.

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Tax Holiday didn’t intefere with capacity planning

August 10, 2011 on 1:00 am | In Airline Fees, Airline News | No Comments

The Cranky Flier wrote on Monday that the “tax holiday” on airport taxes caused by Congress’ inaction on funding the FAA might have caused capacity planning problems for airlines and that it was therefore sensible that airlines would raise fares to close that gap to maintain predictable demand. 

What the hell?

In addition to sounding like an apologist for airlines, that post may well ought to be a candidate for his own Cranky Jackass award. 

When reading his blog entry, one gets the sense that this brief pause in taxes would have sent airlines into a major tizzy when it comes to capacity planning for the winter season.  I assure that that was not a fear and that airlines are quite a bit more flexible than that. 

It was obvious that the brief elimination of those taxes was just that:  brief.  That meant that for a brief period in time, a rise in demand would not have overwhelmed their aircraft or flights in any major way.  More to the point, while airline demand is price sensitive, it isn’t *that* price sensitive.  If it were, airlines would be able to fill aircraft 100% by offering just a week or two of sales going into the next season.  And it wouldn’t take a big sale. 

But we know that airlines don’t experience such opportunities and to suggest otherwise and justify what was, at best, a greedy move is just wrong.

While I do not like the move on the part of the airlines, I’ll also say that that they were free to do it and they’re also free to experience the negative press from doing so.  I don’t think they should “hold it” and give it back to the FAA either.  This is business, they made their move and it wasn’t illegal or sneaky but it was greedy. 

The point made by more than a few Congresscritters that airlines have been grousing about taxes for years saying they depressed demand and now they’re enjoying the largess of the absence of those taxes was also valid.  But airlines like to bitch about those things that directly affect their demand and never seem to pound on the table over taxes that affect travel.

You’ll never hear an airline scream about the taxes on rental cars and hotel rooms imposed by municipalities and states.  And, yet, those taxes are far more egregious in many cases than any airline tax.

Taxes are necessary and they are what pay for our infrastructure.  Complaining about them doesn’t make them any less necessary.

But back to my original point:  Cranky’s argument is disingenuous at best and far beneath him, in my humble opinion, compared to the body of opinion he’s shared over the past many years.

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Taxes don’t belong to the airlines

July 25, 2011 on 1:00 am | In Airline Fees, Airline News | No Comments

In what I will declare to be the most greedy of moves for 2011, most US airlines have decided to raise fares to offset the FAA taxes that have (temporarily) disappeared as a result of Congress’ inaction on a new bill for the FAA.

By most US airlines, I mean airlines such as American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue.  By raising fares, I mean they’ve raised them about 7.5% to offset the taxes that disappeared.   A few airlines such as Virgin America, Frontier Airlines and Alaska Airlines have so far not raised fares to grab that cash.

I am immensely disappointed in this development and particularly disappointed that I find both SWA and Airtran in that group.  Airlines don’t deserve this money and it is shameful behaviour to run and grab it.

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Spirit Airlines and fees

July 7, 2011 on 1:00 am | In Airline Fees | No Comments

Spirit Airlines is definitely a different airline in this country and often its moves to add fees to its business model causes a lot of fear.  In most respects, I’ve actually come to believe that Spirit is a good thing in the airline marketplace rather than bad.  I certainly don’t blame them for their business model.  If anything, they over-communicate that model and they over-sell their options.  That’s fine and they’re doing nothing illegal or even illegitimate.

They’ve just added a $5 fee (starting in November) for printing your boarding pass at the airport.  Once again, everyone is overreacting to this.  However, this fits within their model and even their typical passenger.  Spirit is for leisure passengers who typically *do* have the means and time to print a boarding pass prior to going to an airport. 

What scares everyone is the idea that every time Spirit adds a fee, other airlines will follow them.  That’s entirely possible when it comes to some fees and I even think the boarding pass printing fee might be one of them for some airlines.  However, it will affect few people and it isn’t a burdensome fee that could cause trouble at an airport.   Plenty of their fees won’t make with other airlines and that’s good, too.  I honestly don’t see a fee developing among network carriers to carry on luggage, for instance. 

But it’s good to have an airline press the issues now and then.  It’s good to have one around that even puts the pressure on LCC carriers from time to time.  I seriously doubt that I will ever fly Spirit Airlines myself.  Their idea of seat pitch is daunting at best for someone who is 6′ 2″ with long legs (29″ seat pitch) and the simply don’t fly to destinations I’m interested in.  I’ll likely stick to Southwest for my LCC needs and Continental for my network carrier needs.

At some point, there ought *not* to be a law against this stuff.  The marketplace *will* settle these issues more often than not.  It isn’t worth the stress thinking about them.

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Let’s talk about traveling military bag fees.

June 10, 2011 on 1:00 am | In Airline Fees, Airline News | 2 Comments

So, Delta got hit badly by a viral Youtube video made by two soldiers among a group of 30+ soldiers traveling under orders back from overseas.  Because they (the group) mostly had 4 bags instead of 3, Delta charged $2800 in extra bag fees (for the entire group) and then got pummeled with bad press for it.

Before we go further, let me say a couple of things as qualifiers.  First, I’m no fan of baggage fees although I think that when anyone is traveling with more than 2 checked bags, yes, a fee is probably in order.  Second, I am not anti-military or anti-GI whatsoever.  Their government service is appreciated by me as well as most.

Now, airlines have typically allowed 3 free bags to traveling servicemen under orders with fees for in excess of that.  That alone is exceptionally generous and it isn’t a kindess to the servicemen, it’s a kindness to the US Government and, by extension, taxpayers.  Why?  BECAUSE TRAVELING SERVICEMEN UNDER ORDERS HAVE THEIR BAG FEES PAID REIMBURSED BY THE US GOVERNMENT.

From USA Today’s story:  “Army spokesman Paul Boyce says the reservists won’t be out anything because their traveling orders stated that all excess bag charges will be reimbursed by the government.”

The airlines aren’t imposing a hardship on servicemen.  In fact, they giving the US government a considerable break on fees instead.  Why is an airline obligated to giveway services and take a hit on revenue just because its government travel by GIs?  It isn’t in my opinion.  To the contrary.  Why isn’t the US government paying for the services it receives from airlines?

In other situations, airlines would heartily argue that giving away such stuff to other parties would raise *your* ticket prices.  They wouldn’t be wrong in that argument. 

Absolutely we should support the troops.  And I (and you) contribute taxes that pay for their travel (as they should) and it should be paid for in full and responsibly.   How would we feel about airlines giving away (for free) services to other public servants?  We would probably be pretty angry and concerned about that.

This may be wholly unpopular but I would offer that Delta is not the villain here.  The US Army is culpable for not making prior arrangements to transport its troops without financial burden. 

It is inappropriate and, frankly, lacking class to make a video, put it on Youtube and turn a company into a villain for something your command structure didn’t identify and take care of.

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jetBlue’s Most Excellent Commercial

May 21, 2011 on 1:00 pm | In Airline Fees, Trivia | No Comments

jetBlue has this most excellent commercial for making its point on baggage fees.  Far better than even what SWA has done so far.   It’s notable, however, that while jetBlue doesn’t charge for the first checked bag, it does charge after that.  It charges $35 for the second bag and $75 for the third bag.

 

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