Coming and Going: How airlines will handle fuel price hikes

Sunday, January 23, 2011

Coming & Going

Fuel up, fees up?

CoGo likes it when some things, such as hemlines and balloons, rise. But not fuel expenses. When fuel prices go up, a scenario that experts see on the horizon, the airlines must absorb the spike, pass it on to passengers or find a creative third option.

"I don't see [fares] going up that much more," says George Hobica, founder of "I think [the airlines] are going to go for new fees."

With existing fees for baggage, pets, preselected seats, locked-in reservations, phone bookings and more, what's left for carriers to squeeze another nickel out of?

Hobica says he can see more airlines adopting American's locked-in fares, which charge travelers a fee to secure a price for a set amount of time. Or they might apply the 10 percent charge on lap children, levied on international flights, to domestic ones. Another option: Copy the foreign carriers and charge a fee on charge card payments or a per-pound fee on checked bags.

"There's a lot of room for new fees," Hobica says. "It's easier to nab passengers for fees after they've booked the flight, because now they're stuck."

Invasion of the buses

Travelers are getting back on the bus - and staying on it.

The evidence: the never-ending caravan plying America's highways.

The proof: a recent study of intercity bus service by the Chaddick Institute for Metropolitan Development at DePaul University in Chicago.

In 2010, according to the report, intercity bus service in the United States reached its highest level in years and remained "the country's fastest-growing mode of transportation for the third year in a row."

Other major findings:

- The rate of growth in 2010 exceeded that of rail and air.

- Intercity bus operations expanded by 6 percent

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