American Airlines, Delta Air Lines and US Airways quickly followed.
Not to be outdone, Frontier Airlines announced that for tickets booked anywhere except on its Web site, it would raise its luggage charges and impose a fee of up to $100 for certain carry-on bags, the third U.S. carrier to do this. Most economy-class passengers will also have to pay $1.99 for coffee, tea, soda and juice.
You read correctly: That fee is for a carry-on bag, not a checked bag.
The moves provoked an immediate outcry from fee-weary passengers, who accused the now-profitable airline industry of making a money grab just as the vacation season begins. But a closer look at their frustrations shows that their options for fighting these new surcharges are limited.
“Airlines have crossed the line and will continue to cross the line, whether it be change fees, baggage fees or whatever other fees they can think up,” says Dale Mellor, a finance director from Steamboat Springs, Colo. “We are largely powerless.”
But just how powerless?
The Transportation Department, which regulates domestic airlines, has “no authority” to regulate the fees airlines charge. “But we do require them to include all mandatory fees in the fares they advertise and to disclose all other fees and significant restrictions to consumers before they purchase a ticket,” said agency spokesman Bill Mosley.
Can’t Congress do something? Not really.
A representative for the House Committee on Transportation and Infrastructure told me that there were no current efforts or legislation to limit the new airline fees.
Since jet fuel prices temporarily spiked in 2008, America’s legacy airlines have turned to fees as a way to ensure their survival, and although airlines might be loath to admit it, ticket change fees have grown more slowly than expected. From 2007 to 2011, the last year for which complete numbers are available, baggage fees collected by the U.S. airline industry increased more than sevenfold, rising from $464 million to $3.3 billion a year. By comparison, ticket cancellation and change fees only roughly doubled, from $915 million to $2.3 billion a year.
Airlines need the money, says airline fee consultant Jay Sorensen. “Fees are a necessary component of every carrier’s revenue mix today,” he says.
But passengers don’t see it that way.
“Are they going to make it $300 next year?” asks Alan Gore, an IT consultant based in Sedona, Ariz. If they did, the change fee would be just $74 less than the average domestic airfare. At that level, airlines would simply have to declare that their tickets can’t be changed at all.
Although airlines say that a change fee represents a combination of the cost to change a ticket and the missed revenue opportunity from potentially having an empty seat, Gore and others don’t buy it. Gore says that the only reason airlines can charge such high fees is “because passengers are so passive about it.”