By now, you've heard that American Airlines is charging many of its passengers an additional $15 fee for their first checked bag. Though customers and consumer groups alike are protesting the charge, few have noted that it's just the latest of many add-ons tacked onto the price of some tickets. Bringing golf clubs on your trip to Florida? $25 each way on some airlines. Want to redeem reward miles? $25 handling fee, maybe even a $100 penalty. Need to change your itinerary? That may cost you up to $250.
We’ve entered a new era of air travel — one dominated by fees for services that were once included in the ticket price.
The fee hikes have been spurred by escalating fuel prices. With the price of crude oil dancing around the $130-per-barrel mark, drivers and airlines are feeling the same pinch at the pump. In fact, as of May 23, 2008, jet fuel prices were up nearly 98 percent from May 2007, according to the International Air Transport Association. To put this into perspective, fuel now makes up roughly 40 percent of the ticket price of most airlines, up from 25 percent last year, according to the Air Transport Association.
“Airlines need to cut capacity and raise fares,” says George Hobica, founder of AirfareWatchdog.com, a site that lists low airfares. “The airlines could merge, but I think it’s too difficult. If fuel prices continue to go up, lines could go into bankruptcy.”
It's little surprise, then, that rising costs have begun to trickle down to the traveler. U.S. domestic airfares have risen an average of 16 percent this past year, according to CNN, but airlines are trying to avoid soaring prices that could lead to plummeting ticket sales. To keep down the base rates of tickets, airlines are adding more and more à la carte fees.
“The airline industry, as it is constituted today, was not built to withstand oil prices at $125 a barrel,” American Airline’s chief executive Gerard J. Arpey told shareholders in May. “Our company and industry simply cannot afford to sit by hoping for industry and market conditions to improve.”
The fuel surcharge is the clearest example of the burden being passed to the passenger. The fees are $65 each way on most major carriers, such as Delta, United, American, Continental and Northwest. The surcharge may climb even higher; United Airlines, for one, raised their fuel surcharge twice in April. British Airways has announced an even greater penalty. As of June 3, 2008, round-trip long-haul flights of less than nine hours carry a whopping £156 fuel surcharge. That's more than $300.
Some American carriers now charge for seat preference in the coach section. JetBlue charges $10 to $20 for popular seats, while Northwest passengers pay between $5 and $35 for a seat with more legroom on domestic flights. AirTran charges coach and discount-ticketed travelers $6 for advance seat selection and $20 for an exit-row seat. United Airlines' Economy Plus plan is unique: For a $349 annual fee, the passenger and traveling companion get seats at the front of the economy section whenever available.
Babies don’t take up a seat or add significant weight to the plane. And though flying within the U.S. with a lap-riding child is free on airlines such as US Airways and American, airlines tend to charge international travelers 10 percent of the published adult fare for a child seated on a lap. Continental makes it even more uncomfortable to fly with a leg-riding child — when reserving a mid-June roundtrip flight from Newark to Heathrow, they offered a child fare of nearly $340. By comparison, the typical adult fare for the same Continental flight is between $850 and $875. When asked if the rate had gone up in the last few months, the agent said simply, “All rates have gone up. For everyone.”
That includes rates for the family pet. United’s carry-on fee for small pets recently jumped $15, to $100, each way, matching the rates charged by other legacy airlines Delta and US Airways. Continental charges $5 less, a mere $95 each way.
Being charged for changing your reservation isn't new, but fees have skyrocketed in recent months. Delta’s service is free if the ticket can be changed via the airline's Web site, and it can be a relatively benign $30 for domestic flights changed through certain agents and ticket-sellers. But altering an international itinerary is likely to take $200 from your pocket. United Airlines has hiked its ticket-changing charge to $150, from $100, on non-refundable tickets; it can reach $250 on international non-refundable tickets.
Likewise, redeeming your reward miles (which include frequent flyer miles) hasn't been free for a while. But few travelers realize that the cost of redeeming them has climbed in the past year. Legacy airline travelers must shell out $75 if miles are redeemed without so-called "sufficient notice" — that's three days on Continental and 21 days before the travel date on Delta.
At least these fees can be avoided by, say, booking early, not changing your ticket and not having children. On the other hand, airport improvement fees, and many other fine-print charges, cannot. In the U.S., the airport improvement fee is part of the Passenger Facility Charge program, as regulated by the Federal Aviation Authority, and funds "approved projects that enhance safety, security or capacity; reduce noise; or increase air carrier competition." It's typically $4.50 and is included in the ticket price. International travelers can get stuck with much heftier charges. In Canada, most airports take an additional $15 to $20 from departing passengers. (That's $15 to $20 in both U.S. and Canadian dollars, thanks to the greenback's dismal buying power.)
Desperate to stay in the black, airlines are finding more and more ways to nickel-and-dime their customers. What we once took for granted — reasonably comfortable seats, food, beverages, blankets and pillows on long flights and free luggage check-in — may soon go the way of Pan Am. The airlines are not unaware of the public's souring opinion. When asked about his company's increased fees, American Airlines representative Tim Wagner said, "We see the same public reactions that you do."