Airline profits may mean more elbow room for a little while

The airline industry wants to thank you. Last year, it was mired in despair. The post-financial crisis recession left the carriers beleaguered and desperate for a turn of fortune. Corporate and leisure travel had fallen precipitously, and doubling down on extra fees, though prudent for profits, alienated both those considering a flight and the passengers with little choice but to hit the road. The brutality of 2009 was evident, and it seemed as though all there was for 2010 was the hope for something better.

Well, hope paid off.

Three quarters into this year, money is again beginning to flow, as a result of (finally) climbing fares, additional fees and an increase in passenger traffic. United Continental, Southwest and JetBlue have reported strong profits for the third quarter using a variety of tactics, but an increase in sales and higher prices appear to be the universal driver. And, this may translate to a bit more elbow room for you.
According to the Associated Press, airlines are beginning to bring back some of the routes they cut last year, as indicated by decisions at Delta and American Airlines to hire more flight attendants. The challenge, however, will be to increase capacity (and thus headcount) without imperiling this year’ hard-won profits.

The business of satisfying pent-up demand isn’t easy for the airline sector. After all, capacity can’t be added one seat at a time. Restoring a route to handle more passengers comes with it the obligation to fill the plane (to the extent possible) each time, in accordance with revenue per available seat mile (RASM) targets.

Nonetheless, the carriers seem ready to rise to the challenge. JetBlue is amping up fourth quarter capacity by up to 10 percent, with Delta looking at an increase of 5 percent to 10 percent. This follows even faster growth in September, according to the Associated Press:

Still, most of the airlines saw traffic rise even faster than capacity in September suggesting they have enough business to support the additional flights. The only exception was Delta, which added capacity slightly faster than traffic rose.

The moves come in anticipation of a strong 2011, according to Ray Neidl, an analyst for Maxim Group. He tells the associated press that the growth in capacity “is a little more long-term,” adding that “[d]espite the lackluster economy, it’s going to be a big year for airlines, especially as consolidation kicks in.”

So, what does this mean for the flying public?

Well, you may not have to occupy that middle seat for a little while, and the odds that someone else will be in it may be improving. The increase in capacity necessarily precedes an increase in sufficient demand to make it profitable, so enjoy it while you can! If the airlines can’t fill those new seats, a return to austerity could send you back to sharing an armrest.

[photo by Joe Shlabotnik via Flickr]

Airline baggage fees continue to climb

What started with a single airline charging passengers to check their second piece of luggage has slowly evolved into a massive money making scheme netting some airlines as much as $1 Billion in additional cash.

The state of airline travel now means there are just a handful of airlines that do not charge for additional bags, and those airlines that do charge you, are getting so greedy that they are actually raising their prices again.

At the moment, United Airlines and US Airways charge $15 for the first checked bag, and $25 for the second – that fee is about to go up an additional $5 for passengers who do not prepay to check using the airline website.

Delta and Northwest (the same airline now they have completed their merger) will be charging an insane $50 for the second checked bag on international routes.

The only major airline that has (so far) resisted the urge to charge for checking bags, is Southwest. This low cost carrier has even launched a massive TV advertising campaign promoting the fact that they offer free checked baggage on their flights.

Bottom line is that a family of 4, each carrying 2 bags will pay as much as $500 if they fly abroad on some airlines. The only solution to the problem is to bring less stuff, or try and stuff as much as possible into the overhead bin.

A well maintained airline baggage fee chart can be found over at the site of

What strange things have been found on planes?

Travel resources start exposing airline fees

We’ve covered sneaky airlines fees in the past, and as airlines learn the tricks to adding more and more fees to your trip, some online resources are starting to fight back.

In the past, your ticket would consist of a base price, with some airport taxes, and a 9/11 security fee. Then airlines started whining about rising gas prices, so they added fuel surcharges. Then when gas prices went down again, they conveniently forgot to remove the fuel surcharge.

What we are left with nowadays is ticket prices where up to 65% of the fare is actually for fees, taxes, surcharges and other additional stuff.

The worst part of all these fees is that it is often impossible to get a clear picture what you are paying for. Your e-ticket will usually only show some cryptic codes, and most third party booking sites don’t let you view a price breakdown at all.

Then, to make matters worse, some airlines have started adding fees for things that used to be free – checked baggage, snacks, drinks and even preferred seating.

The tide is turning though – and several online services are helping you battle fee creep. The first of these services is, where you can find the add-on fees for most major US airlines, and several foreign carriers.

The site is pretty smart, and even lets you find the cheapest carrier sorted by additional fees. In addition to the basic fees, you’ll also find an overview of virtually every other fee airlines have come up with, including “telephone booking fees”, “ticket change fees” and even the price of a snack or headset once on board. It isn’t the prettiest site, but it is an extremely comprehensive resource.

The next new resource is TripAdvisor – they have been around for several years, but recently added airline price searches. In addition to showing the cheapest airline, they also claim to be the first to show exactly what your flight will cost, but I did not really find any fee information I couldn’t find on any of the other booking resources.

Bottom line is to do your homework before booking your ticket. It makes no sense to save $50 on your ticket, only to be charged $100 for checking a couple of bags.