Airline Passengers Face Even More Fees
Higher Charges Aim To Offset Fuel Costs

By Del Quentin Wilber
Washington Post Staff Writer
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.

The airlines also like the baggage fee because it will limit who pays for the extra fuel used for each plane. United Airlines estimates that only one passenger out of four checks an extra bag.

Airlines said the fee might even help them reduce costs by encouraging passengers to leave the extra bag at home. That would reduce handling expenses and save the jet fuel needed to carry the additional weight of that luggage.

The airlines have also steadily boosted fuel surcharges, which are often difficult to spot in fare information provided on their Web sites.

The fuel surcharges have increased from about $10 to as much as $25 each way in recent weeks, depending what kind of competition the carriers have on certain routes, according to airline representatives.

Airline representatives said fuel surcharges are easier to add and to quickly delete from their databases than fare increases. But they still must be careful about where they impose them.

US Airways has a fuel surcharge of $25 for routes in which it does not have low-cost competition. But that is dropped on routes where it competes with low-cost carriers. For example, it does not have a fuel surcharge on flights competing with those offered by Southwest Airlines, said US Airways spokesman Philip Gee.

The carriers have had an easier time raising existing fuel surcharges on international flights because there are fewer competitors and virtually no low-cost rivals for those. Several major airlines raised those surcharges by at least $10 last month.

Northwest Airlines, for example, announced last week that it was raising its fuel surcharge on some international routes as high as $160 one way, up from about $140. The carrier's other surcharges range from $115 to $155. United flights from Dulles International Airport to destinations in Asia have fuel surcharges that can reach $150. The carrier's transatlantic flights can have fuel surcharges that top $120, the airline reported.

Delta last week took the fee game a step further. It announced that it was adding a $3 fee for curbside check-in at airports (American, United and US Airways have a $2 fee for that) and increasing the charge for children flying without accompanying adults on direct flights and for taking pets on planes. The airline also raised its fee for making a reservation by phone from $20 to $25. The charge for checking an oversized bag went up from $100 to $150. A one-day pass for its airport lounges now costs $30, up from $25.

"We were really motivated to try keeping up with what was going up on the fuel side," said Lee Macenczak, an executive vice president at Delta. "We don't like having to do this."

Airline passengers said they understand the struggles the industry is facing. But they get agitated when told about the looming fees, most of which will take effect by early May.

"It is not justified because they are delivering less and less service," said Sarah Cannova, 32, a District resident with two daughters. She arrived at Reagan National Airport on Sunday night after a vacation in Florida. "I think it's gratuitous. They deliver less and less value, but they are charging you more in an indirect way. You feel completely powerless."

Cannova and other fliers all pointed to frustrations with airline reliability, which is not likely to improve with the new fees. During the first two months of this year, 71 percent of flights arrived on time, according to government data. Last year ranked as the second-worst year for flight delays since 1995. Consumers filed 13,168 complaints about the airlines with the federal government in 2007, up 58 percent from 2006, according to the Bureau of Transportation Statistics.

The bureau reported that the airlines mishandled 4.4 million bags last year, up 8 percent since 2006.

"The airlines are pushing the envelope," said Jean Klaus, 65, as she and her husband dropped off bags Sunday night at National for a flight home to Ohio on US Airways. The couple paid $6 to check their three bags. Last year, the airline instituted a $2 fee per bag for curbside check-in.

Next month, the couple will have to pay $25 to check a third bag on the carrier. "It's outrageous. Checking bags should be free," she said.