Airlines celebrate record profits with new fees

Airlines bring new fees following profitsIf you were running a business that just pulled in record profits after two years of business hell, what would you do? Some companies would show their customers some appreciation. Others would find new lines of business or products in which to invest. The airlines, however, seem poised to jack up their fees.

Let’s face it: ancillary fees have been good to the airlines. Paying extra for food, checked bags and premium coach seating – not to mention cancellations – is the principal reason for the extra cash the industry pulled in last year. And having tasted success, the airlines want more.

According to a report in the Tampa Tribune, the prospect of increasing fuel costs is causing experts and analysts to forecast additional charges for passengers this year. Possibilities include a fee for paying with a credit card (a real gem since cash transactions are highly unlikely, especially online), using the web to make reservations and for talking to a human being to get a seat assignment. The first two are brutal, because passengers would be charged for behavior (a) encouraged by the airlines and (b) that lowers their operating costs.

George Hobica, founder of AirfareWatchdog.com, tells the Tampa Tribune, effectively, that it’s a defensive move, since “[a]irlines don’t want to go back in the red.”

It’s also consistent with the emerging strategy of finding new ways to charge customers without having to raise ticket prices.

According to Hobica, as many as 10 new fees could gain traction in 2011, some of which are in use already.

So, is it gouging or prudent business? That’s hard to say. Airlines are in the business of generating profits – they can’t be faulted for that. Customers have little negotiating power, so the whole line of desperate thinking that we can somehow prevail seems moot.

[photo by Lindsay_Silveira via Flickr]