Airline Fees: Gateway to Chaos?


The proliferation of new airline ancillary charges continues to present a challenge to travel agents and their clients. Ranging from baggage fees to seat selection and headsets, ancillary charges are not only constantly changing but also complicating pricing of trips.

Sure, the fees generate needed new revenues for the airlines. Remember the fuel surcharge few objected to? But the current proliferation of fees raises hard questions, including costs to consumers. American Airlines, for example, reports that revenues from sources such as confirmed flight changes, purchased upgrades, buy-on-board food services, and baggage service charges increased 1.4 percent to $585 million in the third quarter of this year compared with last year.

Noting the proliferation of service fees, IdeaWorks, a research firm, estimates that ancillary revenue and a la carte pricing in 2008 delivered $10.2 billion in revenues to the airlines. IdeaWorks surveyed 92 airlines worldwide and said ancillary revenue jumped 345 percent in 2008.

Consumers and agents are asking questions. Are all fees clearly stated? Easily accessible? Fair? Do we need a child-sitting-on-lap fee? A recent front-page feature in USA Today suggests increased chaos as boarding passengers scramble to get space in overhead bins in part to avoid fees. They note crowded flights, fewer flights and mixed enforcement of baggage policies. One possibility: Congressional regulation of baggage policies.

Look at Delta Air Lines. Its online breakdown of baggage policies runs for pages, and includes the following:

“You’ll be charged an excess baggage fee each time you go over any one of the allowances. For example, if you have an extra piece of baggage that goes over the weight limit and the size limit, then you’ll be charged three times: once for the extra bag, once for going over the size limit, and once for going over the weight limit. Fees are for each additional bag, each way.”

Another challenge is offered by United Airlines’ new option of enabling customers to “pay one flat price of $249 and check two standard bags at no additional cost” every time they fly on United or United Express in a year. United’s move caught many by surprise. Not only are travel agents wondering if other carriers will follow suit, but also what other surprises the revenue-hungry airlines are planning.

United’s Premier Baggage deal is part of United’s Travel Options plan. With the recent news of the premier baggage subscription, Travel Options has been expanded by United to a “portfolio” of 13 products. Customers can opt for more legroom, more comfort and less waiting, starting at $47.
Clients can also save up to 50 percent with a bundle of options, including extra legroom with Economy Plus seating, early boarding, priority security line access and Premier check-in line access.

American Airlines urges travelers to familiarize themselves with changes affecting international and domestic checked-bag charges. It upped economy-class charges—travelers may check one bag for no charge and a second bag for $50. But at American Airlines, as with other carriers, fee policies are increasingly complex, including rules for destinations.

There are exceptions. In American’s case, this includes AAdvantage members who purchase tickets in First and Business classes as well as those who purchase full-fare tickets in economy class. The current policy is a first-checked-bag charge of $20, and $30 for a second checked bag. There are exceptions by route, destination and benefits for frequent flyer members.

JetBlue gives customers a break with the first checked bag free, but charges $30 for the second and $75 for the third. JetBlue warns of fees for oversized and overweight bags that may be checked in on a load-availability basis. Fees will be assessed for each category that applies, i.e., if a bag is overweight and oversized, the overweight fee plus the oversized fee will apply. JetBlue also has policies based on aircraft type.

Virgin Atlantic reports it will change its check-in baggage policy to a Piece System across the entire network for all tickets booked from November 25 onward. The airline also adds a distinct fee—as does US Airways—between online and airport booking: First extra bag online is $48, but at the airport it is $60 each way. According to the airline’s policy, “You can pay for your first and second checked bags when you check in online and save. There is a $5 service fee for checked bags at the airport. Also, all bag fees are per person and each way.”

What’s ahead? Airline customers and travel agents can bet the farm that more “creative” ancillary fees are coming and that pricing trips will get more complex.

One promising note is that Amadeus is developing new technologies to cope with fees proliferation. But for the moment it’s going to be more fees, more cost and more chaos.