Congress to investigate airline fees … but not for your benefit

by Tom Johansmeyer on

Congress is digging into all those new airline fees. Extra bags, special check-in situations … you name it. Before you start cheering on our lawmakers, though, you should know that they aren’t doing this from a sense of consumer advocacy. Frankly, Congress doesn’t give a damn how much you pay for air travel. But, it does care how you pay. Why? A cash-strapped government is wondering if it’s leaving money on the table.

When you look at your receipt, the line with “taxes” has never been lost on you, right? Well, the add-ons aren’t included in this number: Congress has a tax on airfare, not all the other stuff. So, for the airlines, this has been a tax-free revenue stream, one that’s been crucial to helping the already bruised airlines survive the current recession.

Yet, is it really just airfare in another form? That’s what Congress wants to know. Even if this is a different form of revenue, do you think it will be left untouched? Of course not! The government needs money, and there’s nothing stopping it from passing a new bill to tax the extra services. How much resistance would be raised?

Think about it.

The average person, even if traveling frequently for personal reasons, wouldn’t be hit too hard by the tax on the fees. If a $10 bag surcharge were taxed at 30% (just to pick a random and unreasonably ugly number) and a passenger flew weekly, he’d rack up $152 in taxes on the additional fees … and that’s assuming he needs to check the extra bag and did so every week. If faced with this or a higher income tax, how would you ask your congressman to vote?

Add it all up, and there’s some tax money to be had. The airline industry has pulled in more than $3 billion this year from the extra fees we all love to hate. If they were taxed at the same rate as fares — a much more reasonable 7.5% — $225 million in tax revenue would be generated. That’s not a trivial number.

The fees aren’t going to go away, and if all goes as it seems, a new tax will be here to stay, as well.

Five ways to beat the competition to the overhead bin

by Tom Johansmeyer on

There’s nothing so gauche as to stick your carry-on into an overhead bin far ahead of your seat, grab a book or magazine from it and walk 17 rows back to your seat. Because, whether you know it (or give a damn), one of the passengers sitting under your bag may not have a place to put his. Then, when the plane settles in at the gate, he’ll try to shove his way to the back of the plane (where he was forced to stow his stuff) while everyone else is moving the other way. It’s a recipe for disaster.

And, it’s getting worse.

Airlines have had to cope with shrinking budgets, thanks to a dismal travel market, and that means making cuts. So, when there isn’t another pill water, peanut or blanket to chop, the airlines have to take away the planes themselves. Airline capacity is falling almost across the board this year, making planes more crowded. That translates to fuller overhead bins. The other airline money-making scheme – charging fees for extra baggage – has also cramped the cabin. Passengers are hoping to dodge the extra cost, even though it is modest.

When there’s an airline problem, of course, Congress rushes to devise some sort of solution – an obvious move given the track record legislators have had “fixing” the industry. The latest move appears to be an effort to limit and standardize carry-on sizes across airlines, with the TSA enforcing the rule at checkpoints. What will this accomplish? Well, your security wait just got longer. Not only will they have more work to do, but you’ll have the joy of waiting behind 27 people who all need to argue with the TSA employee about how the new rule is bullshit.

Until Congress comes in and accomplishes nothing, what matters most are strategies for making sure you can get as much of your stuff as possible into the overhead bins, especially if you want to keep some foot space under the seat in front of you. Here are five ways to make the whole process easier.

1. Board early
Chance favors the prepared. Get onto the plane as soon as you can. If you have elite status, use it. Linger by the gate to wait for your zone to be called. Then, strike when the announcement is made.

2. Be honest
You could become a scumbag and toss your carry-ons into the first overhead bins you see … or you could play it straight and put your bags in the appropriate bin. Become a part of the solution, not the problem.

3. Consolidate
Don’t carry too many carry-ons, and if you do max out the gear you can tow, bite the bullet and stick some of it under the seat in front of you.

4. Gate-check
You’ll have to wait a little longer for your bags, but it isn’t nearly as bad as having to linger by the carousel. This is as close to a win-win as you’ll find in the hell we call air travel.

5. Deal with checked luggage
Sometimes, you’re going to have to suck it up and check your damned bags. Don’t try to fight with the flight attendant or gate agent over size or amount. You’ll only delay the process … especially if the flight attendant has to announce that some of the bags in overhead bins will need to be checked. Don’t push the envelope, and learn to live with the rules.

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Five tips for booking holiday travel

by Tom Johansmeyer on

If you’re planning to fly home for the holidays this year, it’s time to start booking your flight. Even though fares are cheaper than they were last year, prices have been going up over the fast few weeks, according to a report in USA Today. Thanksgiving prices are down around 7%, with the Christmas/New Year’s season down 12% from last year. Since the travel market is still limping along, you may be able to pick up some deals. To get the most for your money, though, you’ll need to put in a little bit of effort.

1. Turkey over ham: Priceline.com puts the average price for a Thanksgiving ticket booked from July 1 to October 1, 2009 at $361. For the December holidays, the average was $440. Opting for the closer holiday thus can save you a few bucks.

2. Don’t be demanding: if you have the elbow room to choose different dates around the holiday (maybe visit mom and dad a little longer), you can trim a few dollars from your fare – in particular the new $10 (each way) surcharge that some major airlines are applying to flights from November 29 to 30 and December 19, 26-27 and January 2 and 3. Being flexible on airports might nab you a better deal, as well.

3. Visit, don’t move in: we’re all familiar with the extra baggage fees that airlines have come to enjoy rely on. Cut your load down to the essentials. Doing your laundry on your parents’ dime may be easier and cheaper than the local laundry dive, but your savings may disappear if you try to drag it all on the plane.

4. Use your computer: check in at home or work. The lines will be crazy at the airport anyway, so you’re actually paying yourself to have an easier trip. If this isn’t win-win defined, I don’t know what is.

5. Save a little, not a lot: pounce on reasonable fares. If you try to wait for the deal of the year, you could be stuck paying much more than you wanted. Pay a little more than you may want to pick up some predictability.

While you’re at it, start thinking about how to survive the annual airport gauntlet. For Christmas last year, I put together a list of ways to make your travel experience a bit easier. It may be worth another look.

British Airways offers free companion fare

by Katie Hammel on

Fly on British Airways between now and January 29, 2010 and you could earn a free companion fare for your next flight.

To get the free ticket, you need to sign up for the Executive Club (which is free) and take a round-trip flight to any one of the 300 destinations to which the airline flies. Then, book another ticket January 4 to July 30, 2010 for travel January 11 to December 15, 2010. You’ll pay full price for your ticket but just taxes and fees for a friend.

Don’t count on sitting next to your companion though, at least, not unless you’re willing to pay up. British Airways now charges passengers $30 to $90 to choose their seats 24 hours before departure. After that, they get free pick of what’s left, which means they may not be able to sit with their traveling companions.

The airline has also reduced baggage allowances and instituted more fees. The charge for the first additional bag is $50 to European and UK destinations and $60 for other international locations. At those prices, the companion fare isn’t exactly “free”.

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Increasing airline baggage fees displayed in pretty colors and numbers

by Scott Carmichael on

This chart shows the increase in airline baggage fees during the the last couple of quarters. As you can see, American Airlines and Delta Airlines grew from around 40 million Dollars in Q2 2008 to 118 million Dollars in Q2 of this year. You did read that correctly – they each made 118 million Dollars in just one quarter, just off baggage fees.

The total money generated from baggage fees in 2009 between these 10 carriers is 1.23 billion Dollars. And those numbers are only for the first two quarters. With the current new generation of baggage fees, we are on track to reach about 3 billion Dollars for the entire year.

Baggage fees are here to stay, and when you see that airlines can make 118 million in just a couple of months, you’ll understand why.

(Data based off Department Of Transportation data)