Airline Passengers Face Even More Fees
Wednesday, April 9, 2008
Airline passengers, already enduring persistent flight delays and other customer service headaches, are confronting another aggravation: mounting fees for everything from checking a second bag to sending a child alone on a trip.
Carriers are turning to the fees and charges -- some of which are built into the cost of a ticket -- to help them cope with rising fuel costs, which account for increasing portions of their budgets.
Just in time for the summer travel season, airlines have tacked on a $25 fee to check a second bag, and yet another carrier announced last week that it was adding a fee for curbside baggage check-in. Others have steadily brought back pesky overnight-stay requirements to help them better separate business fliers from penny-pinching leisure travelers. Most have tried to slip fuel surcharges into the cost of tickets -- fees that have climbed past $150 each way on some international flights.
Passengers won't be feeling the squeeze just in their purses. Most major carriers have also announced reductions in flights by the fall to help improve efficiency, a move that will cram more passengers onto already crowded jets.
The new fees and flight reductions are the latest examples of how the industry has evolved since it emerged from a historic downturn nearly seven years ago. Since then, most of the major carriers slashed jobs, packed more seats on planes, eliminated hot meals in economy class, began charging passengers extra for seats with more legroom in coach, and made them pay cash for in-flight meals.
Now, analysts say, the principal culprit is the price of jet fuel, which has risen from an average of about $90 a barrel last year to more than $130 in recent days. "These fuel prices are an airline-killer," said Darryl Jenkins, an industry consultant. "There is no airline right now that has a long-term viable business plan" to survive such high fuel costs.
With fuel prices so high, Jenkins said that about 90 percent of domestic routes are no longer profitable under today's fare structure. Last week, ATA, Aloha and Skybus filed for bankruptcy protection and shut down. Analysts and airline executives blamed the carriers' business practices and high fuel prices.
Jenkins and other analysts said passengers should expect more fees in the coming months. The fees are often easier to sustain than fare increases, which are often undercut by low-cost rivals.
"Airlines are going to add as many fees as humanly possible," said Michael Miller, an analyst with the Velocity Group. "They don't need the market to approve fees like they do with fare increases. This is an easier way to get revenue . . . and they can be extremely lucrative."
United Airlines led the industry in finding new fees when it announced in early February a $25 charge to check a second bag. The airline will begin assessing the fee May 5. It will not affect the carrier's premium customers.
US Airways quickly followed suit with the same fee. Then Continental and Northwest airlines, as well as Delta Air Lines, announced last week that they were adding the $25 fee, too. Airline representatives said they would not refund that charge if the bags are mishandled. The airlines will begin collecting the fee in the coming weeks.
Airline executives said they like the $25 luggage charge for a variety of reasons -- but mostly because the fee is more likely to endure than fare increases. Northwest Airlines reported that 11 attempted fare increases since January have failed to take hold.