Smart Spending

Is There No End In Sight? Airline Fees Continue To Provide More Revenue

Do you remember the days when air travel used to be fun? When you’d book a ticket and the cost was the cost? When you didn’t have to fight for overhead space in the cabin of the plane because you used to be able to check your bags for free? When you could pick your seat and not be charged extra for it? Those were the good ol’ days, weren’t they?

Depending on which report you believe, airlines collected anywhere from between $27 billion to $36 billion in 2012 in fees, an increase of over 20% from 2011. And because that’s apparently not enough, a study conducted by TravelNerd reports that U.S. airlines changed or introduced more than 50 additional travel fees since June 2012, with 28 of the fees relating to baggage.

United Airlines grossed the most in non-fare revenue in 2012, followed by Delta, American and Southwest. In terms of percentage of total revenue, Spirit Airlines – which has a reputation in the industry for charging the most egregious and ridiculous fees – made 38.5% of its total revenue from fees in 2012.

Airlines will tell you that the margins in their industry are incredibly small and that – if they tried to raise fares to include all of the things that we’re now charged for – people would not fly as often. But the fact is that we’re not really given the full story when we book our ticket on an airline’s website. The fare we’re charged doesn’t show the baggage fee or the fact that we have to buy our own food on the plane or that we now have to pay to watch a movie that used to be for free or that we can’t even pick our own seats sometimes without paying extra.

The history of some of these fees goes all the way back to right after September 11, 2001. At that point, many airlines began dropping meal service on some flights (except for those in first and business class) and only providing soft drinks for free. By 2010, there was virtually no airline that provided free meals.

In a seemingly foolish move, US Airways (another airline with a less than stellar reputation) started charging for all drinks – including water, soda and coffee – in 2008 but discontinued the practice almost immediately because (in a rare showing of solidarity and good sense by the other airlines) no other carrier would follow suit.

In 2008 American Airlines started charging passengers $15 each way to check a bag, followed by all other airlines rather quickly. (The airlines claimed at the time that the baggage fee was instituted to help defray some of the ever-increasing costs of jet fuel and that may have been true when the fees started a few years back. But the cost of oil – as of the day I write this – is hovering around $104 a barrel, almost $50 a barrel less than it was when airlines began soaking us for baggage fees).

Some of the more recent fees include paying to pre-board an airline and paying what can amount to a hefty premium to sit in a row with extra leg-room (typically from $59 to $129 each way).

If you’ve gotten on a plane any time recently, you won’t be surprised to know how many people carry on their luggage and, frankly, it seems to be oversized luggage that scarcely fits in the overhead bins. People not willing to pay the checked bag fee will often take a chance bringing their bag to the gate with them. If the overhead compartments are filled, the airlines have no choice but to check your bag – at no cost – for you.

Spirit Airlines – truly the Ebenezer Scrooge of airlines – has decided to make you pay to even carry on a bag. According to their website, passengers can save “especially if you only bring a free personal item”.  A free personal item, however, doesn’t include a carry-on bag. If you decide when you’re booking that you’ll probably be bringing a bag on to the plane, it will cost you only (seriously, only) $35. The longer in the process of check-in you wait, the higher the price gets so if you wait until you get to the gate, it will cost you $100 to carry a bag on.

If you’re willing to let Spirit choose your seats for you, they won’t charge you. But if you want to select your own seats – perhaps you’d like your minor children to actually sit with you on the plane or maybe you want to sit next to your significant other – it will cost you up to $50 more per seat. Don’t fly with this airline if you at all value your cash and integrity.

The best way to circumvent some of these airline fees is to get an airline-branded credit or debit card. For example, United Airlines partners with Chase and, if you buy your airline tickets using your Chase card, your checked bag fees are waived. Bring your own healthier snacks and food on the plane. Take along your iPad or Kindle to read or watch movies for free, or listen to music. Bring your own small pillow or blanket if you can (American, JetBlue and US Airways all charge you for pillows and blankets). And pack a lot of patience. Because things aren’t likely to get any better for passengers any time soon.