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Airline fees: The Navigator asks the $7.8 billion question

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By Christopher Elliott
Sunday, June 6, 2010

How much does your airline ticket really cost?

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Admit it, you have no idea. Once you add the cost of a checked bag, a confirmed seat reservation and a day-old turkey sandwich, you'll pay more than you expected. A lot more, probably.

Not so long ago, ticket prices included all of the above. But thanks to an industry trend called unbundling, many airlines are now stripping everything away from the ticket but the cost of your seat.

It's a wildly successful scheme: Domestic airlines collected an astounding $7.8 billion in ancillary fees last year, up 42 percent from 2008, while keeping their base fares artificially low. (Legacy airlines still managed to lose $2.8 billion, somehow.)

But passengers are confused and angry about being nickel-and-dimed. Finally, help is on the way.

An amendment to the current Federal Aviation Administration reauthorization bill introduced by Sen. Robert Menendez (D-N.J.) that would require airlines and third-party Web sites to display a "complete and understandable" breakdown of an airfare, as well as any other possible fees that might be incurred on the flight, is likely to pass this summer. Last week, the Transportation Department issued an administrative rule that, if enacted, would require air carriers to give their customers a more accurate price quote. Two private companies are also trying to clear up some of the confusion about fares. Seattle-based InsideTrip (http://www.insidetrip.com), a site that rates airline flights by their overall quality, last month unveiled a feature called FinalAirfare, which factors bag and drink fees into a price quote. It's a work in progress. A recent estimate added $12 for soft drinks to my fare, even though my airline doesn't charge for them.

A second project, which has just entered the test phase and is expected to be rolled out by the end of June, is called TruPrice. The site will allow you to check all optional items before you conduct an online fare search, offering the ability to see the real cost of a ticket and compare ticket prices side by side.

Christopher Muise, a former corporate compliance manager for Delta Air Lines and president of the Atlanta start-up, said that his development team has already identified 39 unique airline fees -- surcharges for everything from luggage to antlers. (Yes, antlers. Frontier Airlines charges an extra $100 to check a set.) By the time their research is done, they expect to have 80 optional surcharges in their database.

"Right now, if you want to know how much your ticket costs, you have to use a calculator," he said. "You also have to know where to look: Each airline has its own way of describing fees, and they are not always clearly disclosed. People are frustrated."

Muise allowed me to evaluate TruPrice before its introduction, and I conducted several test searches. At any time after I generated the results, the site let me check or uncheck a fee, instantly recalculating the "true" price of the ticket.

TruPrice has a lot of potential, but like InsideTrip's FinalAirfare, it is far from done. A sample fare from New York to Atlanta, for example, correctly identified Spirit Airlines as having the lowest fare, but when I checked the options for a seat assignment, a drink and extra legroom -- all of which should cost extra -- it didn't recalculate the fare for that airline. It did for several other carriers, but without reorganizing them in my display from cheapest to most expensive.

Still, considering that the company didn't exist before March, the site is an impressive achievement. And when it launches, TruPrice will almost certainly change the way we buy airline tickets.

If there's a sentiment underscoring the recent rule changes and private ventures, it's this: Air travelers have the right to know how much their tickets cost, and the way prices are quoted must change now.

As airlines generate revenue by telling their customers half-truths -- and apparently get away with it -- there's a sense of urgency to these initiatives. Maybe it's because airlines are just getting started with unbundling.

"We're waiting for them to start charging for air," said Muise.

Elliott is National Geographic Traveler magazine's reader advocate. E-mail him at celliott@ngs.org.


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