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

Last 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.

Road test: Expedia’s Rewards Program

Expedia launched a reward program last month in a what might be an effort to recapture some of the market share that they’re slowly losing to the airlines and their respective websites. A spend-based program, users receive points in direct proportion to the amount of money that they spend on the site. Those points are earned in addition to any points earned from the airline, hotel or car rental that the user books and can be spent on either hotel or airline discounts.

Occasionally the site also offers points specials as well, incentivizing users to book particular hotels or packages for double or triple points. Currently, for example, users can earn double points by using their Mastercard for purchases.

Since the program is spend-based, the reward is directly based on the number of dollars that you spend on the travel, so the real value is based on which price points Expedia sets their rewards at. Currently, the travel agency offers discounts on either airline or hotel bookings, with direct airfare booked in the former case and a hotel coupon offered in the latter.

So how valuable are the points? Gadling Labs collected some baseline data for a few flights out of Chicago. Off the shelf, a ticket to Detroit from June 24-26 should cost about $200, while the Expedia Rewards Program bills 20,000 points. That’s $20,000 in booked travel in exchange for a $200 ticket — or a 1% return. Not so great compared to the 2-3% earned from a rewards credit card, but on top of another reward it’s not a bad deal.

Hotel rewards are earned on a sliding scale and come in the form of a coupon. For 3500 points ($3500 in direct spend) the user earns a $25 hotel reward card (or a 0.7% kickback) . On the opposite end of the spectrum, 50,000 points earn a $1,000 certificate (2%). It looks like high end hotel bookings might be the better reward — but that makes sense, since you’re going to be dumping a fatter stack of cash into the Expedia coffers — you should be rewarded.

But who is going to spend the requisite cash to get even the lowest level of rewards? $3500 is a lot to spend on travel, even over two or three years, and a family or casual traveler weighed down with everyday life and a dozen other rewards program is surely going to lose the Expedia Rewards Program in the noise.

It seems that the best fit for the program is for the high volume traveler or the travel agent. One who books tens of thousands of dollars on a corporate card and who can quietly reap the rewards on the side. For those people, making the quick change from the Amex booking engine to Expedia takes only a click, and over three or four months the rewards can really pay off. But for the rest of us common travelers, it’s probably best to stick with the direct bookings (and protections) of the direct airline websites.

Earn free frequent flyer miles by purchasing dollar coins

Rewards credit cards are a great way to earn a few percent cash back or frequent flyer miles for everyday purchases, but they’re geared against the consumer’s rate of purchase — the more you spend, the more rewards you earn.

Intrinsically this concept conflicts with the budget traveler. Sure, 2 miles for every dollar spent would be great, but few people spend enough money each month to make the miles worthwhile. If one spends 300 dollars and earns 600 miles per month, for example, it would take 41 months to save enough for a free flight on most airlines.

But a few savvy consumers have learned to game the system, all courtesy of the US mint. On their website, the mint advertises free shipping for over $500 in purchases of presidential $1 coins — at cost. This means that a user can show up at their online store, purchase $1000 worth of dollar coins on their rewards card and have them shipped to their front door for free. A quick walk to the bank puts that money back into circulation (hopefully for the payment of one’s credit card bill) and the user emerges a few miles richer. At that point, the user can repeat the cycle.

Sounds like a cash advance, right? Sort of, but mileage hounds have found that the neither the credit cards nor the IRS view it in that way, so they’re still buying dollar coins and reaping the rewards.

As to any impact on one’s credit score or the value of carrying 20lb boxes to the bank every day, the jury is still out, but for those with time and a bit of financial flexibility it seems like a great trick to earn miles.

You can read more details and extensive discussion over at Flyertalk and Milepoint.

Earn elite qualifying miles on Delta with Hilton stays

It’s pretty common in the travel world to see alliances between airlines and hotels when it comes to earning miles and points; a few points exchanged here and there among giants is an easy way to keep brand loyalty and momentum among the masses.

Normal earnings, however, are almost always limited to redeemable miles — that is, mileage earned won’t count towards elite status or any tiered thresholds that the airline or hotel measures you against over the course of the year.

With this new promotion between Delta and Hilton, however, that’s different. Now, any stay at a Hilton property will earn the traveler upwards of 1000 Elite Qualifying Miles (EQM), which means that you can earn part of your elite status on Delta without even flying. While these miles are only limited to 10k over the promotion period, this could be a good way to top up a few extra miles to reach 25k or 50k miles before year’s end — and you can do it without suffering the loss of leg room.

Sign up for the promo over at Hilton and don’t forget to make Delta your earnings partner.

[via Gary at View from the Wing]

Whose frequent flyer miles are most useful?

Like airlines, hotels, rollaboards and car services, not all frequent flyer programs are created equal. Plenty goes into measuring the quality of a particular rewards program. How difficult is it to redeem the miles? Can one redeem said miles on a partner airline or for other travel tidbits like hotel stays or car rentals? How many miles are required to make a booking?

It’s difficult to compare all of those data against what a particular traveler may need on a given day, so Ideaworks (link opens a PDF) ran a simple study: how easy is it to purchase an economy ticket with an airline’s miles?

Using a narrow sampling of available routes and itineraries, the study’s findings are pretty dramatic. Among US carriers, Southwest Airlines had the easiest to redeem miles, with 99% of queried itineraries available. Behind them, Alaska Airlines and Continental Airlines scored success rates of 75% and 71% respectively.

At the bottom of the heap? US Airways only returned availability on 10.7% of queried routes, while Delta Airlines wasn’t far ahead with 12.9%. Perhaps that’s why so many frequent flyers are unhappy with their respective mileage programs.

Indicative as these data are, it’s worth nothing that the small sampling taken by Ideaworks doesn’t fully represent the usefulness of each carrier’s miles. Route availability, network, seasonality and elite status all play a role in what routes are available to each traveler

[Via Smartertravel]