Monday, October 21, 2013

Airlines Return to Civility... for a Fee

When airlines decided to start charging for checked bags what did the average traveler start doing? Cramming everything he/she possibly could into a carry-on bag!

Airline fees bring in more than $15 billion a year and are the reason the airlines are profitable. But the amount of money coming in from older charges like baggage and reservation change fees has tapered off. So they need to find a way to charge us more! But will we mind this time?

Would you pay a small fee for extra legroom, early boarding, access to quiet lounges, renting Apple iPads preloaded with movies, a hot first class meals in coach, letting passengers pay to have an empty seat next to them, have your luggage delivered directly to your home or office? I have to say after experiencing the extra leg room I am all for paying the extra fee to get it!

Delta Air Lines recently gave its flight attendants wireless devices, allowing them to sell passengers last-second upgrades to seats with more legroom. Count me in for something like this!

"We want to get back to a point where people feel like travel isn't something to endure, but something they can enjoy," says Bob Kupbens, a former Target executive and Delta's current vice president of marketing and digital commerce. I like the sound of that!

Most fares today don't cover the cost of flying that’s why there is a need for airlines to “create” all these fees. While the average domestic roundtrip base fare has climbed 3 percent over the past decade to $361.95, when adjusted for inflation, the price of jet fuel has nearly tripled.

When oil prices spiked in 2008, airlines added checked baggage fees. Passengers still bought tickets on the base price and didn't think about the extra expense until the day of travel.

Now airlines are recasting fees as trip enhancements. Tricky, very tricky!

On one traveler’s recent late-night US Airways flight home landed past six-year-old son's bedtime and she had to work early the next morning. So, for $30 she bypassed the baggage carousel and had the suitcase delivered.

U.S. airlines collect more than $6 billion a year in baggage and reservation change fees. They also collect $9 billion more from selling extras like frequent flier miles, early boarding and seat upgrades. Together, the fees account for 10 percent U.S. airlines' revenue.

Airlines now alter fees based on demand. United Airlines used to sell its Economy Plus extra legroom seats for one price per route. Today, aisle seats cost more than middle seats; prices are higher on popular flights.

Airlines are also starting to bundle items. Passengers purchase items they might not necessarily buy alone; it also simplifies the dizzying array of offers.

American Airlines offers a package for $68 roundtrip that includes no change fees, one checked bag and early boarding. Delta is experimenting with a $199 subscription that includes a checked bag, early boarding, access to exit row seats and extra frequent flier miles on all flights a passenger takes between now and Jan. 5, 2014.

You can find the full, original article here

Have you ever paid for any of these new extras?

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