Oil Prices Fall, Airlines Terminate Fees … Not!

Today, as of 11:50 a.m. ET, the price of oil sits at $99.27 a barrel, down 32 percent from July’s high of $147. That’s good news for the airlines, whose single largest operating expense is fuel. And since it’s good for the airlines’ bottom lines, it’s good for those who own the airlines’ stock.

What’s in it for consumers?

So far, almost nothing. In fact, [% 2664798 | | United %] had the temerity to announce they were doubling the fee for the [[Airline_Fees#Second_table | second checked bag]] on a day that oil prices were dipping below $100 and appeared headed even lower over the long term.

So much for the airlines’ oft-repeated claim that the slew of [% 2623262 | | fees %] they’ve unleashed on consumers was linked to the soaring price of jet fuel.

But there is one exception to the airlines’ refusal to roll back the supposedly fuel-related fees.

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[[Air_Canada | Air Canada]] announced yesterday that, effective from September 23, passengers traveling on Tango and Tango Plus fares will no longer be charged $25 to check a second bag. Here’s how Air Canada explained the move:

Although the cost of fuel remains highly volatile and far above historic norms, the recent retreat in oil prices is enabling us to reinstate our previous baggage policy. We are eliminating the second checked bag charge on North American Tango and Tango Plus fares, reflecting our customers’ expressed preferences.

The above strikes me as both uncharacteristically principled, in following through on the implicit promise to rescind the bag fee when fuel prices retreated, and refreshingly honest, in acknowledging customer dissatisfaction with the fees.

Air Canada has set a standard that U.S. carriers currently fall far short of.