Airlines have best quarter ever … thanks baggage fees!

Airlines have best quarter thanks to baggage feesEvery time you pay to check an extra bag you’re making someone’s life better. The latest data from the U.S. Department of Transportation reveals that the third quarter of 2010 was the most profitable for the U.S. airline industry since the department began keeping score in 2002. The industry’s operating profit margin hit 10.5 percent in aggregate. Low-cost carriers, as a class, had an operating profit margin of 11 percent, its best performance since hitting 11.2 percent in the third quarter of 2006.

How did the airline industry pull this off? Recovering economic conditions helped, of course, but so did the stuff that passengers have gotten comfortable complaining about. More than $900 million in third-quarter revenue came from baggage fees, with another $590 million from reservation change fees. Then, there was another $646 million in ancillary fees. It all adds up to more than $2 billion for a single quarter.

So, while we’re all complaining about these extra fees, it looks like many of us are paying them, too.Spirit picks up the highest percentage of its revenue from ancillary fees at 26.9 percent, up from 24.2 percent in the second quarter of 2010 and 20.6 percent in the third quarter of 2009. Allegiant was next at 9.7 percent. Delta and US Airways derived 7.7 percent of their revenues from ancillary fees, with Southwest at 6.7 percent.

Of course, the money isn’t just going into the pockets of airline employees and executives. The six network airlines spent 25 percent of their operating expenses in the third quarter on fuel. United Airlines spent the most on fuel among network carriers – 25.7 percent of total revenue – with Allegiant leading low-cost carriers at 44.1 percent.

Before you feel too sorry for airlines when it comes to fuel costs, remember those profits. Four network airlines had double-digit operating margins, along with four low-cost carriers.

[photo by Tracy O via Flickr]

Review: Balanzza Mini Luggage Scale – avoid nasty surprises at the airport!

Traveling with bags means trying to stay one step ahead of the airlines – and staying one step ahead of them, means knowing exactly how heavy your bags are. There no nothing more annoying than arriving at the airport, only to discover that you overpacked, and will either have to pay up, remove some items or move items between bags.

To help prevent these nasty surprises, you could consider investing in a portable luggage scale. Last year, we mentioned the Balanzza Ergo digital luggage scales – and now Balanzza has introduced a more compact version of their award winning product – the Balanzza Mini.

The Balanzza mini is the smallest digital luggage scale in the world. The device is about three times smaller than the original version – but still provides the same features and 100lbs. capacity.

To weigh your bag, you simply strap the scales to your handle, turn the unit on, and pick it up. As soon as the Balanzaa Mini beeps, you’ll have an accurate measurement. The scales are accurate to 0.2lbs – which is probably a better result than many uncalibrated airport scales.

The Balanzza Mini compared to the larger Balanzzo Ergo. Both are very accurate, but the reduced size and weight of the Mini has its obvious advantages. That said – with very heavy bags, the larger version may be more comfortable to lift.

The Balanzza Mini retails for $24.95, and is available directly from Balanzza, select Bed Bath & Beyond stores and a variety of online retailers.

Flying Wizz Air, European low-cost airline


I just flew with Wizz Air, a major budget airline in Europe whose name and stunts I had previously only snickered over. It turns out in addition to offering low fares across Europe, they are also the largest carrier in Hungary (at least according to Wizz, Malev Hungarian would beg to differ) and a major player in Poland, Romania, and Bulgaria. Last week I traveled to Bulgaria (look for some future Weekending posts soon) and decided to try to fly across the country from the Black Sea town of Varna to the capital city Sofia rather than spend another eight hours on a bus. As is often the case with budget carriers, Wizz has caught a fair amount of flack for their nickle-and-diming fare structure and customer service, so I was anxious to experience it first-hand.The booking process
The low-cost carrier advertises flights as low as 15 GBP from London to Poland before taxes and fees, and I found fares from Varna to Sofia starting at 78 Bulgarian (around $50 USD) plus a few bucks for taxes. Not too bad, a lot pricier than the bus but much faster. Enter the laundry list of service fees. First, you are hit up 5 Euros per passenger to use a credit card (only other options are European credit cards or bank transfers that aren’t possible for US travelers). Next, you are offered a bunch of services that might be useful for some (extra legroom, flexible booking, priority boarding, etc) but not integral to the flight. Then comes the big guns: baggage allowances. Whether I’m traveling for two days or two weeks, at maximum I pack a standard wheelie carry-on and a purse, and avoid checking bags whenever possible. Wizz allows just one piece free, up to 10 kg (22 pounds), and charges 15 to 60 Euros per bag depending if you select the option online, at the airport, or at the gate. Not wishing to be caught with a surprise charge at the airport, I opted to check one bag. Final tally: 117 Bulgarian leva per ticket or $76 USD, booked less than two weeks in advance.

Pre-departure
Haven’t even gotten to the airport and there’s another potential fee: flight check-in. It’s free if you do it online up to 7 days in advance AND print boarding passes, or 10 Euros if you wait until arriving at the airport or can’t find a printer. After entering your passport information and checking in online, your boarding passes are available as web documents or PDFs. I downloaded the PDFs and emailed to my hotel in Varna, who were kind enough to print, but boarding passes via email. Arriving at the airport, they will still check your documents, but my baggage was not scrutinized and I noticed several fellow passengers with more than one bag to carry on, so I may have been able to get away with a purse and a rollerboard.

In-flight experience
Seating on the flight is open, causing the usual every-man-for-himself rush at the gate, but inside the plane, seats are relatively comfy with snazzy purple leather seats. There is an excellent (and free!) in-flight magazine with great destination info and articles that made me want to move to Poland immediately. The Varna to Sofia flight was too short for the full food and beverage “service” (i.e. they didn’t wheel out the cart of stuff you pay for) but the usual drinks and snacks were available for purchase at typically high prices (2.50 Euros for water, 3 Euros for Cup Noodles, which is sort of a great flight food idea). Flight attendants were helpful and cheerful in the signature purple and hot pink colors.

All told, I’d fly Wizz again (especially to Poland), especially if I were near to one of their hubs. Fares are much lower than the competition (Bulgarian Air priced out at 211 leva for the same route) and if you stop looking at fares as inherently all-inclusive, the a la cart structure is actually refreshing and honest. There aren’t many perks and no in-flight movies or tv, but with most flights under 3 hours, you can get by. Airline experiences are all in the seat of the beholder, but with prices this low, a leather seat and free English-language reading material feels more luxe than low-cost.

Irish Minister’s fury over Ryanair $120 baggage fee

Ryanair has yet again managed to make the news with their outrageous fees – though this time, they may have annoyed the wrong person.

For the busy summer season, Ryanair passengers will have to pay £5 more for their checked luggage – making the first checked bag £20 ($29) , and second bag £40 ($58). The real kicker comes when you are unable to check in online – which will double the checked bag fee to £40 for the first bag and £80 for the second.

With these numbers, a family of two (each with two bags) that finds themselves unable to do an online check in could be paying as much as $350 for the right to travel with their bags. And when you consider that seats on Ryanair sell for as little as $5, you’ll see why a bargain airline isn’t always the cheapest option.

Irish Finance Minister Sammy Wilson is so outraged, that he is urging passengers to take their business elsewhere. Mr. Wilson says Ryanair is treating passengers with “arrogance and disdain”.

Of course, the big winner in this new fee scheme is Ryanair- just this week, they announced a healthy profit from the past year, making them one of just a handful of profitable airlines in the world. So – if you plan to travel on Ryanair this summer season, be sure to verify that you can do online check in, and that you pack your stuff in one bag, otherwise you may burn through all your vacation cash in just a few flights.

(Photo: AFP/Getty Images)

What? You’re still paying the airlines to carry your bags?

Now that the airlines have raised, yet again, their fees for checked bags, it’s time to take another look at the alternative: shipping your bags, or better yet (if you’re staying in one place once you arrive) just the contents of your bag ahead of your arrival using economical ground shipping services.

Why deal with the airlines, when UPS Ground and FedEx Ground offer better tracking, insurance and security, can be much cheaper in some scenarios, and will actually refund your shipping fee if there’s a delay or loss? No waiting in line at the airport! No pilferage! No schlepping!

Airfarewatchdog.com has looked at four domestic route scenarios (short, medium, and long haul) and compared three shipping services and two airlines (one with high bag fees, and one with low fees) to see how much you can save by not entrusting your bags to the airlines.

As you can see from the chart, depending on route and method, the cost savings achieved from shipping vs. schlepping range from little or nothing to dramatic. But as we explain, even if costs are the same, dealing with a company like FedEx
can be much less stressful than with an airline.

Consider: a single 25-pound suitcase or shipment from Boston to San Francisco by FedEx Ground costs about $31 vs. $23-$25 on Delta or nothing on Southwest.

But once that suitcase weighs over 50 pounds, excess charges kick in on the airlines, even on Southwest: you’d pay $56 for a 55-lb. bag using USPS on that same Boston-San Francisco trip, but twice that on Delta, which adds an extra $90 fee each way for bags weighing over 50 pounds. Even Southwest will charge you $50 each way.

And if your bag is both heavy and oversized (larger than 61-62 linear inches), you’ll get hit with triple jeopardy on some airlines: a fee for the first bag, plus an overweight fee, plus an oversized fee. Such a bag might cost nearly $300 on Delta on a trip from Los Angeles to Seattle vs. under $40 via FedEx Ground.

Also of note: the typical 22-inch rolling suitcase weighs 9-10 lbs. and airlines will shun responsibility for what they consider “normal wear and tear” if the suitcase or its wheel mechanism is damaged in transit. If you’re staying in one place once you arrive, do you really need a suitcase at all? Put your clothes and other personal items in a sturdy box and you’ll pay ground shippers even less than the prices shown in our chart.

But even if the costs are the same airline vs. ground shipping, consider these advantages of shipping:

  • Better tracking: You can track your shipment online step by step. Try that with an airline.
  • Safer: There’s less chance of something going missing or getting damaged.
  • Convenience: you can breeze through the airport without waiting in line to check bags.
  • Responsibility: If an airline loses or delays your bag, they’ll keep your fee and play the blame game. FedEx and UPS will at least refund your shipping fees. Plus, airlines refuse to take responsibility for losing or damaging anything they consider “valuable,” such as electronics or business items. You can insure these items with the shipping services for a small additional fee.
  • Less schlepping: True, you have to either drop off your shipment at a post office, UPS office or store, or FedEx or Kinko’s location (or you can arrange for pick up for a small fee in some cases), but let’s face it: fighting for overhead space is no fun, and lugging luggage through mile-long airport concourses is no fun either.

Clearly, we’ve only given examples for domestic shipping, but USPS Priority Mail rates for international shipping are surprisingly competitive with the airlines’ fees for checking bags on international routes.

And even if you’re the carry-on type, shipping on your next trip may reveal the joys of not fighting for overhead space and saving yourself a shoulder injury from hoisting a heavy bag into same.

Give shipping vs. checking a try next time you fly. You may never pay bag fees again.

George Hobica is the founder of Airfarewatchdog™, the most inclusive source of airfare deals that have been researched and verified by experts. Airfarewatchdog compares fares from all airlines and includes the increasing number of airline-site-only and promo code fares.