Saturday, May 18, 2013

Airlines Raising Fees – And Starting to Charge for Carry-on Bags

A Lesson in Economics and Why Anti-trust Action Matters

Unamerican Airlines announces this plane will
inaugurate service between Whereyouare and
Where You Don't Want to Go.
The American airline industry has had difficult times in the past, primarily of their own making.  It is a safe and uncontested statement that the industry probably had the worse management of any major U. S. industry. Over the last four decades various airlines either went through bankruptcy, some several times, or out of business altogether.

But ultimately the industry discovered that if they merged enough, and stayed out of each other’s airports they could create a monopoly for a needed service.  And thanks to decades long government laxity in the antitrust area they have been free to do so.  The result, the airline companies now make billions and billions and billions from cancellation fees and baggage fees.

Since jet fuel prices temporarily spiked in 2008, America’s legacy airlines have turned to fees as a way to ensure their survival, and although airlines might be loath to admit it, ticket change fees have grown more slowly than expected. From 2007 to 2011, the last year for which complete numbers are available, baggage fees collected by the U.S. airline industry increased more than sevenfold, rising from $464 million to $3.3 billion a year. By comparison, ticket cancellation and change fees only roughly doubled, from $915 million to $2.3 billion a year.

The people flying with you on  your next flig

But if you are running airline the question today is how can you make air travel any more unpleasant or any more difficult or any more expensive.  The answer, raise the fees even more and charge for carry-on baggage.

Frontier Airlines announced that for tickets booked anywhere except on its Web site, it would raise its luggage charges and impose a fee of up to $100 for certain carry-on bags, the third U.S. carrier to do this. Most economy-class passengers will also have to pay $1.99 for coffee, tea, soda and juice.

Now in a normal country government regulation (airlines have routinely violated the anti-trust rules and they exist only because of government provides airports so regulation is certainly justified) would correct some of the worst of these abuses.  But this is the United States, with its timid, friend of business wannabe administration and its laissez faire all regulation is bad Republicans. 

If you need to fly, you may not have a choice. And if you have to change your plans, you’re stuck with a change fee that could obliterate some, if not all, of the value of your ticket. Neither the Department of Transportation nor the legislative branch will do anything to stop this.

So expect to hear this phrase more often, “Thank you for flying Agony Airlines, we hope you choose us next time you need to fly, but quite frankly we don’t give a damn if you do or don’t.  And if  you are flying from Eastbum, New Jersey again remember, we’re the only airline that goes there”

So what's in store for the future?  We have it on good authority Airlines are considering these actions.

1.  Charging $2.50 for each bottle of water that a passenger brings on board.  (And $20.00 to re-hydrate any passenger who tries to avoid drinking liquids altogether.)

2.  Instituting a $5.00 charge for putting any belongings in an unoccupied seat that is next to the passenger.

3.  Allowing the option of not hearing the safety lecture for a cost of $25.00.

4.  A fee of $8.00 for selecting a seat that reclines.

5.  Having to pay $9.00 directly to the flight attendant who will try very hard to not pour hot coffee in your lap.

6.  A $3.00 charge every time you raise the windown shade, $5.00 for lowering it ($10.00 if you are lowering it because you are being blinded by the sun.)

Yep, here they come.

1 comment:

  1. A great and well said post, TDPE. Will we have to get down to only one airline per city or maybe only two, one for each half of the country before anyone will discuss anti-trust issues? No, as you state, this is the USA. Its in the best interest of the airline business, thus, to do anything would be job-killing big government. I predict by the end of this decade, we will be charged if we want a lawn chair. Otherwise, we'll be standing up hanging on to bars or straps like a bus. BRLA