Airline Fees: You Get What You Pay For Or Weapons In Travel Class Warfare?

airline fees - plane seat meapLast month, the media was abuzz over increased airline fees for pre-assigned seating, with many concerned that it would especially affect families who want to sit together for no additional cost. Even New York Senator Chuck Schumer got involved, asking airlines to waive fees for families traveling with children. Rather than look for victims or call airlines “anti-family,” however, look at the bigger picture. Airline seat fees are nothing new, but they are increasingly being used as another weapon in the arsenal against the airlines’ least desirable customer: the infrequent flier. If travelers will choose airfares based on a difference of nickels and dimes, does this force the airlines to nickel and dime the traveler?

The real divide in travel now isn’t between business and leisure travelers, families and singles, or even first class and coach; it’s between frequent fliers with airline loyalty, and price-conscious consumers who won’t hesitate to switch carriers for a cheaper fare. Savvy travelers who fly more than a few times per year understand that it pays to be loyal to one airline. In addition to earning miles for future trips, frequent fliers can jump to the top of upgrade lists, skip long check-in and security lines, and even waive many of the fees not included in the base fare. Travelers who fly only a year or less are more likely to book the cheapest ticket they find, even if the difference between carriers is just a few dollars, assuming the service will be similar (or worse, the same as they remember the last time they flew). What’s the incentive for airlines to give such passengers anything for free if they might never fly them again? “The customers that are more loyal, who fly more often, we want to make sure they have the best travel experience,” said American Airlines to Associated Press.

People are quick to call airlines greedy, and while they are looking to make money, running an airline is hardly a lucrative business these days. The Wall Street Journal recently ran a nifty graphic breaking down the cost of an average flight, showing that on a 100-person flight, the airline is making a profit off only a single seat. Between the rising costs of fuel, staff, security, insurance, and maintenance, most airlines are struggling to avoid bankruptcy or just stay in business. While you shouldn’t feel sorry for the airlines, understand that the alternative to fees is increased base fares, where you may be stuck paying for amenities you don’t need or want.As I’ve lived abroad for two years, I’ve become loyal to Turkish Airlines. They not only have the most flights from my current home airport in Istanbul, but I know I’ll always get a meal even on short flights, never have to pay fees outside of excess baggage, and even be able to use a dedicated check-in desk for travelers with children at Istanbul’s Ataturk Airport. I’ve often paid more to fly on Turkish Airlines than other carriers on the same route to guarantee the same standards of service. This makes me a valuable customer, and the more money I spend with them, the more perks I receive.

Earlier this year, I was looking for tickets from New York to Austin for a friend’s wedding. It was slightly cheaper to fly on American Airlines (my preferred carrier when I lived in New York) than Jet Blue, but as a solo traveler with a baby, I knew I’d be checking a bag and wanting to take my stroller up to the gate. Jet Blue would offer these services for free (American wouldn’t let me gate-check the stroller, but I could check it at the counter for free), and the overall cost would be about the same, plus I’d get free snacks and entertainment. In the end, I chose Jet Blue and was even given a priority seat without charge because the flight was relatively empty. If I were still based in New York and flying frequently, it would be more worthwhile to me to fly American to build my frequent flier status and miles for places I’d like to go.

As a parent who travels frequently with my child, I understand the potential nightmare separate seating could cause, but I also understand that airlines can’t make exceptions without making some passengers unhappy. If airlines were to waive a seating charge for families, travelers would complain about special treatment. Fliers with elderly parents would ask for exemptions to sit together, people with a fear of flying would want their travel partner close with no fee, and single travelers would feel they were being forced to subsidize everyone else.

Over at Huffington Post, my colleague (and fellow baby travel expert) Corinne McDermott contacted all of the major airlines regarding pre-assigned seating fees. Only Spirit Airlines explicitly said families should pay fees to be guaranteed adjacent seats. In fact, much of the hype about families being separated might really just be that: hype. Most airlines will try to accommodate people traveling together, just reserving preferred aisle and window seats to reward frequent fliers, or sell for an additional fee. It makes sense for an airline to offer a premium like preferred seating for free to a loyal customer, and instead try to make as much money as possible for a customer they may never have again.

Instead of spending time writing angry comments online, spend that time educating yourself about the full cost of an airline ticket and decide where your priorities lie: do you want to pay the absolute lowest fare and expect nothing more than a seat, or do you want to pay for service instead surprise fees? The old axiom “you get what you pay for” is the new reality in airline travel.

Breaking: Delta to refund taxes collected during FAA shutdown

There was hope and outcry last week after news broke that as part of its partial shutdown, the FAA wouldn’t be collecting the fees that it assesses against domestic airline tickets. Looking forward to a tax holiday, many travelers started searching for tickets only minutes after the tax break went into effect — only to learn that airlines had raised their ticket prices to wipe out any savingseffectively pocketing the difference in price.

The outrage has slowly been trickling through the media and into the political ranks of our government, most notably in a letter to Delta from Aviation Operations, Safety and Security Subcommittee Chairwoman Maria Cantwell (D-WA) and Chairman John D. (Jay) Rockefeller IV (D-WV).

Believe it or not, the airlines may be listening. Just this afternoon, Delta Air Lines announced that they would be the first major carrier to refund extraneous hikes imposed by the airlines, provided that the IRS puts plans into place. You can read the full release over on their website.

Lets hope that the other airlines make the right decision and follow suit.

update: Delta Corporate communications got in touch to clarify the refunds:


“..what we’re refunding are the taxes customers paid on tickets purchase before the FAA shutdown, for travel during the shutdown period. The IRS has said that customers who travel during this period, who already paid those taxes, were technically overtaxed and may be eligible for a refund. Delta announced yesterday that to help facilitate those refunds, we’ll provide them directly to our customers so that they don’t have to file a claim with the IRS.

[flickr image via Refracted Moments]

Airline fees are worth more than Facebook

Airlines, Facebook and money

Outside the travel world, everyone’s marveling at the prospect of a Facebook IPO, which could be valued at as much as $100 billion. So, what are we missing while we fawn over Mark Zuckerberg’s creation? How about the slow, stodgy, ugly airline industry. Known for a painful user experience and a steady decline of free features, the likes of Delta and American Airlines are outdoing the hottest online property in the world simply by annoying their customers.

According to data from the U.S. Department of Transportation‘s Bureau of Transportation Statistics, baggage and reservation change fees brought the U.S. airline industry a whopping $5.7 billion last year. Delta picked up close to a billion dollars on baggage fees alone, which doesn’t include what they yanked from the wallets of soldiers returning home from combat. The largest airline in the country also brought in approximately $700 million from reservation change fees.

American Airlines, the fourth largest airline in the United States, came in second in both categories, with $580.7 million in baggage fees and $471.4 million in reservation change fees.The particular beauty of these fees is that they are basically found money. Some passengers need to check bags, and the airlines have to invest in the overhead required to meet this demand. It’s an expense that can’t be avoided. With this fee, they monetized what they’d have to pay anyway. The same is the case for reservation change fees.

The top five earners of baggage fees in 2010 are:

1. Delta: $952.3 million

2. American: $580.7 million

3. US Airways: $513.6 million

4. Continental: $341.6 million

5. United: $313.2 million

Unsurprisingly, the top five earners of reservation change fees don’t look much different:

1. Delta: $698.6 million

2. American: $471.4 million

3. United: $321.5 million

4. US Airways: $253.1 million

5. Continental: $237.4 million

No doubt, activist groups will be up in arms shortly. And airline employees will lament the fact that their executives are so richly compensated while they have endured round after round of pay cuts and layoffs for years upon years.

Frankly, I offer my congratulations to the airline industry. Yes, they are soaking us. Passengers are a captive audience, particularly on routes with limited coverage, and we sometimes have no choice but to pay. The airlines are using this to generate profitable growth for their shareholders, which is their primary responsibility.

So, what about Facebook? The company is estimated to pull in revenues of somewhere above $4 billion this year, most of it from advertising. It is pretty interesting that the popular social network is annoying its customers as a way to generate revenue, just like the airlines!

Who knew that pissing off your target market was an awesome business model?

[photo by Tobin Black via Flickr]

Ask Gadling: You missed your flight


Even in this day and age of flight delays and cancellations, it’s always not the airline’s fault that you miss your flight. It happens: you oversleep, get stuck in traffic, or just run late on the way to the airport and miss your flight. A few months ago, my husband and I were heading out of Istanbul for the weekend and because of unusually long security lines and non-functional check-in kiosks, our flight closed just before we got to the check-in counter and we missed the flight. Turkish Airlines rebooked and ticketed us on another flight with a small change fee. Recently, some visiting friends missed their flight home though they were *at the gate* due to a last-minute gate change and zero announcements. Despite the fact that other passengers made the same mistake, they paid a change fee plus the fare difference, and they were also flying Turkish Airlines.

So what can you do if you miss your flight?

View more Ask Gadling: Travel Advice from an Expert or send your question to ask [at] gadling [dot] com.
  1. Proceed to the airport check in counter – There used to be an unwritten “flat tire” rule that meant if you got a flat tire en route, you could show up and be put on the next flight with no charge. That rule seems to have gone the way of the free meal in coach, but many airlines may still try to help depending on demand and schedules. If you are on your way but think you will miss the check in cut off time but not the departure time, try calling the airline in case they are able to check you in and then rush you to the gate. Even if you know you will miss your flight, your odds of being rebooked are better if you are physically at the airport than if you go back home or to your hotel. You may even still make the fight if you can (politely, please!) push through security if you tell other passengers you are about to miss your flight.
  2. Use your status if you have it – If you are flying an airline you hold status with, now is the time to call the Gold desk. Flying a full-fare or upper class ticket can also help. This is not to say you should threaten anyone or act self-important, you want to show you are a valuable customer who would greatly appreciate being accommodated. Missed flights are another good case for travel insurance, if you’ve ensured your trip, you may be able to be rebooked for free.
  3. Be calm and flexible – It may not be your fault that your taxi driver took the long way to the airport, but you’re still in the weaker position and at the mercy of the ticketing agent. It won’t help to be difficult or angry. Additionally, being flexible about your routing can help, especially if you’ve missed the last direct flight of the day. Ask about connections or even flights to neighboring cities where you can take a train or drive the rest of the way. The day we missed our flight out of Istanbul to Pristina, we ended up on the next flight – to Prague. Your travel plans may not always be so flexible, but getting a seat on a connecting flight may mean you get home – or on vacation – faster.

Gadling readers: what’s your experience been when you’ve missed a flight? What airlines do you find to be the most accommodating?

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.