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Airlines pocket $21 billion in fees in 2010

 While most airlines continue to complain they are losing money, last year 47 of them collected $21 billion in "ancillary fees" - those extra charges for things we often used to expect to get for free with our airline ticket.  Items like baggage fees, seat assignments, in-flight WiFi, and - of course - food!  Even what used to be called plain old good service has a price: witness Air Canada's "On Your Way" service fee.

Airlines are becoming increasingly ingenious, even devious, about things to charge fees for.  For example, several European low-cost online carriers sneak in, at the very last minute, out of the blue a "convenience" surcharge for using a credit card for payment.  Never mind that the ONLY way you can purchase their tickets is by credit card (so, wouldn't this cost be factored into the price already?)

How big a deal are these "ancillary fees?"  Well, just as an indication, here is a summary of some of the U.S. airlines' average take per passenger in fees along with the percentage of the total airline revenue:

  • Allegiant: $33 (29%)
  • Spirit: $25 (23%)
  • JetBlue: $20 (13%)
  • Delta: $23 (12%)
  • Southwest: $6 (4%)
  • Frontier: $4 (4%)

It should not come as a surprise that Allegiant Air is the biggest grabber of unadvertised, unexpected fees: they have become the masters of the game.  A quick stroll through the purchase process at their website (well, it is anything but quick, actually!) will find that at each step of the process (a 4- or 5- screen ordeal), something unexpected gets tacked onto the initial "Total Cost".  You'll see "Seat Selection" ($16.99, in my example), "Priority Boarding" ($9.99), "Baggage Fee" ($29.99), and finally, an most difficult to uncover, something called "Trip Flex" fee ($11.50).

So, in this case, what started out to be a "Total Cost" of $143.98 became inflated to $212.45!  That is a 47% increase!

"Ancillary fees" and "unbundled airfares" are clearly here to stay, and as much as they are distasteful to the consumer, the real objection is the sneaky way they are added into the final price.  Travel agents are familiar with all the tricks, and even when a new tactic comes into play we have the resources and connections to get unwanted fees reversed. This is just one more case that demonstrates our mantra: "Without a travel agent, you're on your own!"

 

 

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