Even though fuel costs are falling faster than a plane without wings, the airline industry continues to ratchet up fees on its passengers. Unbelievably, it insists it’s because of “high” — or for that matter “volatile” — energy costs. Do they think we’re stupid?
Well, sorry to disappoint.
Here’s a helpful visual representation of the major airlines that are trying to cash in on what they believe to be our collective ignorance. It represents estimated annual revenues from new fees introduced after the spring, when fuel costs spiked. Most of them cover the first or second piece of checked luggage.
So here’s the $64 million question: Given these number games, which airlines will get your future business? Are you considering changing your preferred carrier to one that shoots straight — or do you think these surcharges are justified?
(Note: These numbers aren’t adjusted by volume, and are based on news reports of estimated revenues. United’s numbers are a composite of an earlier revenue estimate, factoring in this week’s baggage fee changes and 2009 revenue estimate.)
{ 14 comments… read them below or add one }
Ooh, I can answer that: Yes, they think we are stupid. In fact, they are counting on it. And some of us are stupid, but more of us are either too lazy or too busy to crunch all the numbers and figure out which fee is for which service, and whether it’s worth it. I, for one, would prefer a bit more transparency. If you’ve got to raise the price, just go ahead and raise it, but don’t try to obfuscate and tap dance. To quote/paraphrase Han Solo, I’d prefer a fair fight to all this sneaking around.
Well, at least when they add a surcharge, there’s often a way many consumers can get around it. For example, bring your own healthy food rather than purchasing fatty, sugary, processed packaged “food” on board. Don’t check a bag – bring only carry on luggage.
But, they can charge far more in a surcharge than they can by upping the bottom line cost of the flight…
Can you show an “adjusted by volume/flight miles” version of this chart? Since I don’t know how much bigger United is than Northwest, for instance, makes it hard to know which one is actually charging more in fees on a per flight or per passenger basis. All this chart shows me right now is which airlines are larger.
Bob
My consistent position is that baggage fees, food fees and the like are perfectly justified. You can choose to pay extra for extra service, or you can choose not to.
What is despicable are the so-called “fuel surcharges” which are nothing but classic bait-and-switch. They allow the company to advertise a non-purchasable “base fare,” which is meaningless, then tack on whatever they care to. It is not avoidable by the consumer, and can certainly be shown to have no real connection to the cost of fuel. It is simply a way to advertise fraudulently, avoid contracted discounts and commissions, and, yes, treat us as though we are stupid. I have to think a class-action suit is coming.
Let’s see a bar on there for Southwest’s fees. Oh, wait. They are zero!
I have definitely decided to change my U.S. airline loyalty from United (over 40 years and over 1,000,000 miles) which I believe has been the most egregious abuser of fees and surcharges to Alaska and Southwest.
Greedy implies that they are asking for something they don’t deserve. None of these airlines are profitable, so you can remove greedy from the lexicon.
I don’t care what they charge as long as they provide timely, safe service. I travel for business, and I can’t take a train, or drive, or teleport myself across the country twice a week. I need a profitable airline to serve me… how they become profitable is irrelevant. Profitable airlines will prevent them from becoming Federal airlines.
Can anyone imagine trusting your safety to the folks who brought you the Katrina response?
I have to agree with Mike. Although I think that the “fuel surcharges” should be included in the quoted fare, I want to fly on a safe airline that has enough money to run their business profitably and efficiently. I don’t care if the bags cost $15 or $25 or whatever, I will factor that into the cost. What they should do is not charge so much for business class transatlantic. I would gladly pay 1.5 times or even twice the discount economy fare for a little more space and comfort on a 9 hour flight, but I won’t pay 15 times more.
I suppose if they sold milk for $50/quart, they’d sell a little of it, but they sell a lot more at the current price. Same goes for business class.
Every business needs to make a profit…but make a fair profit.
Where does DL fall in all this?
And as I have said for YEARS, the airlines need to figure out how much it costs to transport someone from point A to point B and price it accordingly.
Fuel is part of the equation—so tell me the price. Not some $19.99 one way plus taxes, landing fees, 911 fee, PFC fee, Facility Maintenance fee, Fuel surcharge, etc.
On September 21st, 2008 at 12:48 pm John F said Where does DL fall in all this?
And as I have said for YEARS, the airlines need to figure out how much it costs to transport someone from point A to point B and price it accordingly.
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This IS deregulation. A airline competitor CAN and WILL flood the market with LOW FARES to undercut a competitor and/or drive them off the route.
Example: Southwest is currently, systemically putting the screws to Frontier Airlines in Denver. Smell BLOOD anyone?
Mike, just because they’re financially desperate doesn’t mean airlines aren’t greedy. It’s one thing if they raise fares to compensate for high oil prices (or for decades of mismanagement). It’s quite another thing if they raise fares by “monetizing” every aspect of the “air travel experience” with fees so they can advertise deceptively low fares and conceal the true bottom-line cost to the passenger. That’s not merely deceptive, it’s greedy.
Indeed, I would argue that the airlines are in dire financial straits because they’re greedy. Or, more specifically, the executives who run the airlines are greedy. They’re guaranteed continually increasing bonuses and pensions regardless of performance, and if they crash their airlines into the ground they walk away with millions of dollars in severance payments. Meanwhile, they brag about using bankruptcy courts (and corporate-friendly judges) as “strategic tools” to break union contracts with their employees. Then they pass on the cost savings to themselves as bigger bonuses. If that isn’t greed, what is? Unfortunately, it’s not confined to the airline industry.
The nickel and dime theory is a bunch of CRAP. Charge a fair price to provide your service and VOILA…you make money. Most of these airlines are so concerned about butting out competition instead of providing quality, safe service that it amazes me. Today you can buy a roundtrip SFO JFK flight on most major carriers for as low as 275.00. LESS THAN WHAT IT WAS 29 YEARS AGO WHEN I STARTED IN THIS BUSINESS. I assume that everyone realizes that labor, fuel, fixing the planes and keeping them in the air costs A LOT more today than 29 years ago. Get real people and airline execs!!! Charge a fair price include what it costs to fly those jets and employ your people and keep the flights on schedule and deal with it. Those people that won’t pay the price will take the bus or not travel at all. For my business travelers, they want to know that when they book a flight to arrive at 330pm it should arrive at 330pm with a happy ground and flight crew and not 530pm with a crew that would just as soon turn you into TSA as a threat to the crew if you ask them too many questions…
Does everyone complain as much about cell phone bills as plane fees. Would you rather have a la carte service charges such as photo, video, ringtone, texting, gaming, Internet access and all or be charged for them whether you use them or not at the top price? Does your fed, state and local fight for you to lower cell phone costs (with 1/3 of the bill going to taxes, I think not.)
Do you complain about rising cost of gasoline but not bottled water, even though half the cost of the water is due to fuel required to ship it from the tap water of one city to your city?
Or do you “buy American” inferior motor vehicles that have the extra cost built-in of the American executives earning 200 times the average auto factory worker, where in Japan that multiple is 15?
Please stop buying batteries. The 5-fold increase in the prices of copper and nickel in the last few years are destroying the economy and no politician is backing a windfall tax on those commodities.
I’m one of those who doesn’t really mind the so called nickel and diming. The alternative is to raise fares. With the various fee surcharges, I can change my behavior to avoid the fees. However, if the airlines raise base prices then the fees are unavoidable.
All I ask is that the fees be well publicized so that I am not surprised.