Airline Fees: The Next Generation 2010

by , SmarterTravel Staff
Money

Imagine you innocently go to reach for the Sky Mall Magazine, but instead are rewarded with a wad of cash or a $500 check, as one reader discovered. Finding money can be about as exciting as hitting the jackpot in Vegas, especially when it's in an unexpected place like an airplane, and many of our readers are big winners. Not to mention, you can now afford to buy something from the in-flight magazine, like that Big Foot Garden Yeti Sculpture you've been eyeing.

What about you?

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Editor's Note: This story was originally published on April 17, 2010. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: airfare, AirTran, Alaska, American, baggage, British Airways, Carl Unger, Continental, Delta, Expedia, Hawaiian Airlines, JetBlue, low-cost airline, Orbitz, Southwest, taxes and fees, Travelocity, United, US Airways.

By now, most travelers have grudgingly accepted that fees are a part of the traveling experience, but that doesn't mean the airlines can't still surprise us. In 2009, and already in 2010, carriers have devised new and improved ways to squeeze a few extra dollars from their customers, a creative streak that shows no signs of letting up. So, let's take a look at the main fee-related developments of the past 12 months, and peer into the future to see what lurks around the bend.

Checked Bag Fees: Bigger, Stronger, More Annoying

In April 2009, US Airways debuted a two-tiered fee structure for checked bags: Travelers would pay $5 more at the airport than they would online. In airline PR parlance, this was a "discount." In real-world terms, this was a cynical attempt to grab an extra $5 from customers who forgot to pay online or simply didn't realize they'd pay the extra $5 at the airport. Naturally, Continental, Delta, Hawaiian, and United followed suit, because no bad idea should go unduplicated.

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Baggage fees have also crept up, and spread to the international market. Domestic travelers can now expect to pay as much as $25 for the first bag, and international travelers could pay between $45 and $60 for the second checked bag.

It's worth noting that since last year's Airline Fees: The Next Generation, Alaska Airlines has added a checked bag fee, leaving us with just two airlines that let you check luggage for free: Southwest (first and second bag), and JetBlue (first bag only).

Check our Ultimate Guide to Airline Fees for an up-to-date list of fees and charges.

How This Affects You

The "gotcha" effect of the two-tiered structure has probably faded by now, but it's still important to remember that many airlines charge two prices for the same fee—and not only bag fees. Alaska, Spirit, and Virgin America all have a two-tiered price system for change fees.

As for the fees themselves, it seems that every fee hike could be the last ... until the next one rolls around. Is there a limit to how much airlines will charge? 2010 may be the year we find out.

Carry-on-Bag Fees Crash the Party

Spirit recently dropped a bomb on the travel world when it announced it will charge up to $45 for carry-on bags, in addition to its fees for checked bags. This decision grants Spirit the distinction of being the first carrier to allow no free luggage whatsoever, aside from a small bag that fits under the seat—perfect for the individual who travels with only one change of clothes and maybe a sandwich.

How This Affects You

The implications of Spirit's move are thus far unclear, but the potential for more airlines to add carry-on fees surely has travelers nervous. Are carry-on fees the wave of the future? Will we someday live in a world where any piece of luggage larger than a knapsack costs extra?

At first glance, the idea of more airlines charging for carry-ons seems unlikely. Widespread carry-on charges would be an affront to passengers. Heck, one senator is even trying to block the fee entirely.

And yet ... that's what we said about checked bags. Stay tuned, folks, this one could get ugly.

The Holiday Surcharge Ruins Christmas

Much debate ensued when airlines began adding a holiday surcharge of $10 to $20 on peak Thanksgiving and Christmas travel days: Is it really a fee? Don't the airlines typically raise fares for the holidays? The answer is "yes," to both. What differentiates the surcharge is that it allows airlines to target specific holiday dates without raising fares overall. Think of it as an old dog learning a new trick.

And that trick is apparently here to stay. American, Delta, Continental, United, and US Airways extended their surcharges into 2010, hitting popular spring break and Memorial Day travel dates. Whatever the surcharge is—a fee, or just business as usual—it's clearly here to stay.

How This Affects You

Fundamentally, the impact of these surcharges is minimal. Travelers have always paid a premium around the holidays and other peak times, and these surcharges don't change that. They simply add a layer of complexity to the process, one more factor to consider when booking.

Travelers should still compare fares across a number of dates, and try to be as flexible as possible when flying home for the holidays. Track the surcharges, and keep them in mind when sifting through fares. If anything, the surcharges may actually help travelers by highlighting which days not to fly.

(In)Convenience Fees

More and more we're seeing airlines tack on fees for services that make flying a little easier. Prefer to select your seat in advance? British Airways will charge you $30. Need to board first? Southwest will happily let you do this for $10. Want to book online? Spirit's cool with that, for $5. Need to use the restroom ... well, let's not get into that.

How This Affects You

The effect here is obvious: You're going to get less unless you pay more. With airlines trying to unbundle fares as much as possible, it's fair to expect more carriers to gravitate toward charging for everything you don't "need." After all, if the basic elements of air travel—checked bags, carry-on bags, etc.—are fair game, why not charge for something that, using the airlines' definition of the word, is merely a convenience?

Travelers will need to be increasingly diligent when it comes to comparing fares. Ask yourself: What's included in this ticket? What will I need onboard? How much will this extra stuff cost? Add it up, and compare, compare, compare.

Goodbye, Standby; Hello Overpriced Same-Day Travel

Standby travel has been dying a slow death, but the end, sadly, may finally be here. So far this year, both American and United have nixed traditional standby in favor of same-day confirmed travel for $50.

How This Affects You

Most people don't plan their vacations around traveling standby, but business travelers, students, and passengers who simply have loose schedules have long used the tactic. As it stands now, only AirTran and JetBlue allow traditional standby travel, and JetBlue limits your options to the flight immediately before your scheduled flight. Every other airline prohibits free, unconfirmed same-day standby in favor of a confirmed same-day option, to the tune of $50 to $75.

Good News: Online Travel Agencies Waived a Ton of Fees!

Perhaps the lone bright spot in the fees game was the en masse elimination of airline booking fees at Expedia, Travelocity, and Orbitz. Expedia and Orbitz also wiped out a number of hotel fees, including cancellation fees.

How This Affects You

Consider the playing field leveled. In the past, you often had to consider the extra $5 (or more) that was tacked on to airfare booked at one of the big online travel agents (OTAs). In many cases, booking directly with the airline was actually cheaper than booking with an Expedia or Travelocity. Not so, anymore.

But the real coup for travelers is the elimination of hotel fees. Expedia, Orbitz, and Priceline got rid of their hotel change and cancellation fees, and Expedia also eliminated its phone booking fee. All of this combines to make OTAs a much more appealing option for travelers in 2010.

Your Take

Readers, what do you think you'll be paying for by the end of 2010? Will more airlines add carry-on-bag fees? Will charging for seat selection become the fee du jour? Leave a comment below with your thoughts and, if you're brave, your predictions. Thanks!

(Editor's Note: SmarterTravel is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Expedia.com.)

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