Pay to pee on Ryanair no joke

by Tom Johansmeyer on

Remember when we called Ryanair’s plans to charge for lavatory access a stunt? Yeah, we do, too. Those were simpler days, I guess. It turns out, that stunt concealed an even larger one. CEO Michael O’Leary announced that the airline will begin charging one pound (around $1.65) for access to the special rooms at the front and back of the plane.

I actually see some restraint on the press-whorish CEO’s part. I expected him to break the fee down by bodily function, charging a premium for what results in a bit more time. After all, time is money, and one person’s long stay could cost a few extra bucks because other passengers may not get their turns.

But, the savvy airline leader is hedging his bets … as he did with the fat tax, which is now off the table (O’Leary calls it “impractical”). No start date has been revealed; only a two-year time horizon was given. But, he does say, “We are serious about it.”

There’s only one way to make this better, and O’Leary’s found it. Instead of charging for the existing abundance, he’s planning to tear a few out of each plan, in order to make room for more seats. This works in two ways. First, there are more people on the plane who become potential piss-payers. Also, there are fewer lavs, creating a scarcity of resources.

Delta backtracks on extra bag fees

by Tom Johansmeyer on

Delta is caving to competitive pressures, cutting its plans for extra bag fees on international flights. The airline says that others have not matched its fee of $50 for the second bag checked on international flights. Now, it will only apply to travel between the United States and Europe. The fee is effective July 1, 2009.

Originally, this new fee was supposed to bring the battered airline (aren’t they all?) – which also happens to be the world’s largest – another $100 million in revenue. That’s a lot of cash, but it’s probably realistic. After all, fees for extra bags brought Delta an additional $177 million in 2008, and it was good for an extra $1 billion for the airline industry as a whole.

First and business class passenger are exempt, given the exorbitant sums they’re laying out already. Also, active military passengers will not have to pay for a second bag – which is as it should be.

Misery works: airlines making money on baggage fees

by Tom Johansmeyer on

The one thing nobody says about the “nickel and dime” strategy is that it can work. For the airline industry, charging passengers for extra bags translated to more than $1 billion in lifeblood to a struggling business last year, according to the Department of Transportation. As much as you may hate to shell out that extra cash, last year, it went to businesses that desperately needed it.

Before the financial decay spread to every corner of the business community last year, airlines typically allowed two pieces of checked luggage per person and charged for anything else that followed. Then, United Airlines started demanding that passengers throw down $25 for a second bag, with US Airways following to the tune of $15.

It adds. Up. United brought in an extra $133 million. Delta picked up an extra $177 million. American Airlines wins with $278 million last year from baggage fees. Even Southwest Airlines pulled in an extra $25 million. Rick Seaney, CEO of Farecompare.com, believes that baggage fees could be worth up to $3.5 billion in 2009.

March airline plunge softens in April

by Tom Johansmeyer on

Passenger traffic is still falling. That’s not going to change for a while. But, the decline slowed in April, signaling that the prolonged sharp dips may be behind us. Some optimists even believe that the worst is over – though I maintain a healthy skepticism.

Note the metric being used: passenger traffic. There’s a lot of mileage between asses in seats and money in the bank. On a positive note, increased passenger traffic means that more people are spending money on travel. Of course, deep discounts are responsible in large part for the increasing traffic. The value of these passengers in dollar terms, therefore, is quite low.

United Airlines reported a traffic drop of 10.5 percent in April 2009 relative to the same month in 2008. Delta and American sustained smaller declines. Southwest, meanwhile, showed a 4.1 percent increase.

And, fares fell.

The average one-way domestic fare paid in the first quarter of 2008 was $213 – compared to $246 for full-year 2008.

For now, however, the airlines believe it’s better to sell seats at any price, especially if they have to put a plane in the air anyway.

Virgin America jumps on the charge for a checked bag bandwagon

by Jamie Rhein on

Virgin America is joining the lets get more money from somewhere routine and is beginning to charge for the first checked bag. Unlike other airlines that charge more for the second checked bag and even more for the third, Virgin America is only going to charge $15 per bag up to ten bags. Ten bags!!! Wow. That’s for one person.

Listen folks. If any of you are thinking of moving, I’d move to where Virgin America flies and head there. With an 70 pound weight limit per bag that’s 700 pounds of goods for just $150. Of course, thinking about what 10 bags of 70 pounds each would look like in the check-in line is a bit mind boggling. Not to mention getting it all to and from the airport. (Think what a couple could move with for just $300.)

Put into effect yesterday, this baggage fee applies to flights booked on or after May 5. Although Virgin America is adding a charge for the first checked bag, it’s lowering the cost of changing or canceling reservations online from $75 to $50.

These fees only apply to those flying in the main cabin with non-refundable tickets. First-Class passengers can bring two checked bags for no extra charge and those with fully refundable tickets can bring one checked bag. [See Virgin America’s press release outlining the changes.