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Delta Air Lines Makes Profit Off Bag Fees — Good For Them!

Delta Air Lines Boeing 767-300ER.

Delta Air Lines Boeing 767-300ER.

There is no question that Delta Air Lines made a lot of money off bag fees last year — $952 million to be exact. While many other airlines made a load of money with bag fees as well, Delta gets the majority of the attention since they made the most. Some attention has been in late night routines (okay, Conan’s bit is hilarious, if not fully accurate) and others have been negative news articles. It seems odd that so many companies are getting pats on the back for making profit out of the bad economy, but airlines end up being punished, like they are somehow earning their money illegally.

Dan Webb, on his blog Things in the Sky, shows that although Delta made more in bag fees than other airlines, that doesn’t mean it is a large percentage of their revenue. His post has a very handy chart that shows that Delta’s bag fees are only 3% of their overall operating revenue. When looking at all major US airlines, Delta is actually 9th in the percentage of bag fees to total operational revenue with ultra low cost carriers Spirit and Allegiant at the top the list with 10.5% and 8.7% respectfully.

There are a lot stories out there hating on the bag fees, but one of my favorites is from Boston’s NCEN.com titled Fuming over Bag Fees. It is a classic story talking to passengers who are up in arms for the airlines not being “honest” with them and hiding these bag fees. Even for people that do not travel often, it is pretty difficult not to know about bag fees. For those that do not, every airline I have ever flown makes it quite clear when booking your ticket, if there will be additional fees for luggage so one can plan accordingly. Passengers in NCEN’s story act like airlines are literally opening their wallets and stealing their money. The author, Peter Howe, states that airlines are “addicted” to fees like they are some nasty habit that should be kicked. Since when does a business not like a new idea that makes them money and allows them to survive? Without bag fees, you can be certain that not as many airlines would be able to survive, there would be less competition and airfares would be higher overall.

Airlines are not charities — they are businesses looking to make profit. Airlines had this idea to charge passengers for bag fees, obviously many passengers pay this fee and airlines are able to make a profit. Why would an airline get rid of these fees? Customers have the ability to vote on these fees with their pocket book. Southwest Airlines and JetBlue both don’t charge you for checking a bag (on Southwest, you can check two for free), but of course, they are not always the cheapest option, even when checking a bag.

All that being said, yes I know that they are annoying when you are checking in and you have to drop another $50.00 for two bags. I do whatever I can to avoid paying bag fees myself and cringe when I end up having to pay them.I wish airlines would do a better job explaining why they are charging the fees. It seems like most airlines are like “we are charging them, take it or leave it approach.” I do not think most customers realize that weight costs money and instead of selling it as, “if you have a checked bag, you will owe more,” sell it as, “if you do not have a checked bag, we now let you save money.”

I believe that ala cart pricing will be the future of airlines. Many other businesses operate this way and why should I have to pay for something that I don’t want to use. When I book a hotel room, I might cringe when I have to pay $25 for parking and $20 for Wi-Fi and $5 for a bottle of water, but it is understandable. Why should parking be built into my hotel price if I do not have a car?

Image: Thomas Becker

SHORT TAKE: Update on Allegiant’s Boeing 757s

Allegiant's Boeing 757 N902NV at Paine Field.

Allegiant's Boeing 757 N902NV at Paine Field.

If you read the blog, you know I have a nice little fascination with Allegiant getting Boeing 757s. From the first announcement, to getting some of the first photos the Boeing 757 in Allegiant livery, to photos of the 757s in the new, new livery and their ETOPS delay.

Dan Webb on his blog, Things in the Sky, has a great update on Allegiant’s 757s. It looks like Allegiant will be pushing back additional purchases of used Boeing 757s and leasing others. They will only be flying one domestically to gain the experience to get ETOPS certified to fly to Hawaii. Allegiant tells me they will be flying N902NV which is currently housed at ATS at Paine Field.

Alaska Airlines Starts Flights from Bellingham, WA to Honolulu

Alaska Airlines Boeing 737-800 about to leave Bellingham for warm Honolulu.

Alaska Airlines Boeing 737-800 about to leave Bellingham for warm Honolulu.

Bellingham is located about an hour and a half north of Seattle and about fourteen miles south of the Canadian border. Over the past few years Belingham International Airport (BLI) has been growing tremendously. Friday was an exciting day for the airport and Alaska Airlines. Even though Alaska and their sister carrier Horizon Air have been flying out of Bellingham to Las Vegas and Seattle for quite sometime now, Alaska has now started non-stop service to Honolulu (HNL). They will fly to Honolulu and back once per day using a Boeing 737-800 aircraft. Alaska started their first flight to Hawaii in 2007 and now has eighth west coast cities connecting to the islands of Hawaii.

“Alaska Airlines is proud to call the Pacific Northwest home. So we’re delighted to offer Bellingham its first-ever nonstop scheduled service to Hawaii,” said Joe Sprague, Alaska Airlines’ vice president of marketing. “Our new Honolulu flights will allow travelers from north of Seattle and the Lower Mainland to take advantage of our low fares, award-winning service and Mileage Plan earning opportunities via an easy-to-access, nearby airport.”

Flying to the state of Alaska has become huge for the airline. I was able to talk to Bob Derse, Regional Manager of Sales and Community Marketing in the Northwest and he explained when he started with Alaska about 30 years ago, 80% of seat miles were flown to and from the state of Alaska. Today there are only about 16% of the seat miles flown to Alaska and 15% being flown to Hawaii. Derse, the other local Alaska personnel and the airport’s personal were all very excited for this flight. Of course all of their excitement was nothing for the full plane load of passengers who were waiting to head to Hawaii. Well, actually it wasn’t a full plane. Due to weight and range issues, the flight will be flown with 10 empty seats. That is a win for passengers, since this means there will be quite a few empty middle seats, making the flight more comfortable.

This guy is loving the idea he is heading to Hawaii!

This guy is loving the idea he is heading to Hawaii!

I asked Christina Aldanese of the Hawaii Visitors and Convention Bureau if Hawaiians thought it odd to fly on planes to the west coast of the United States on an airplane that has “Alaska” on the side. She explained that Hawaii and Alaska states have a sort of sisterhood with both not being a part of the continental United States and the last two to join the union. Many folks going to and coming from the islands truly appreciate the additional flights that Alaska has provided.

Since this was such a big (and fun) deal, Alaska wasn’t going to let this happen with out some special treats. Passengers were greeted by employees in Hawaiian garb and were given a special party bag, food and drink. After going through security, there were Hawaiian decorations and more food and drink at the gate. Before boarding, there was an Hawaiian blessing done with a gentlemen in Hawaiian garb chanting and splashing water from a bowl with what looked like braided seaweed. He started from the gate and went through the plane and back inside. It was quite entertaining to see. While he was doing this there was an Allegiant flight that was de-boarding and I don’t think I have seen so many looks of curiosity from passengers.

There were plenty of smiles coming from people as their boarded the aircraft, knowing in a few hours they would be in Hawaii. Although Alaska is the first airline to fly from Bellingham to Hawaii, they most likely will not be the last. Allegiant has announced they plan to commence flights out of Bellingham, but their ETOPS certification of their new Boeing 757′s have been delayed, causing the flights to be pushed to at least 2012. This will give Alaska time to market their new route and start to build a loyalty for passengers flying from northern Washington and southern British Columbia to Honolulu.

To help you celebrate, Alaska is offering special discounted tickets for quite sometime. You can fly to HNL from BLI for just $149 each way — hmm, maybe I can take advantage of that.

MORE GOODIES:
* My photos of the Alaska Airlines event
* Video from KOMO4 News

My Review: Flying Allegiant Air for the First Time

Allegiant MD-82 (N416NV) at Bellingham with a blue tail.

Allegiant MD-82 (N416NV) at Bellingham with a blue tail.

I recently had the opportunity to fly from Bellingham, WA to Las Vegas, NV on Allegiant Air (note: this was not a free ticket and I paid full fare). It was time for a little vacation, but vacation doesn’t mean I can’t review my flight.

On the blog, I have covered Allegiant quite a bit. I have looked at the possibility of them starting flights from Paine Field, talked about their Boeing 757′s and have explored their recent growth. However, I have never actually flown Allegiant and felt it was about time.

Although I haven’t flown them, I have had a small, odd crush on the airline. They have a very unique business model of flying older MD-80′s out of smaller airports and are geared towards the leisure traveler trying to get somewhere warm. They fly places that other low cost carriers don’t fly offering non-stop service to airports not usually served. They also seem to under cut the competition in fare price.

When booking my ticket I was looking at flights out of Seattle (SEA) and Bellingham (BLI – which is located about 1.5hours north of Seattle). Flying Allegiant out of BLI was $50.00 cheaper than anyone else — even after the fees I ended up paying. Add that parking at BLI is only $9/day vs $28/day at SEA and the 1.5hr drive north sounds like a good idea compared to the 30min drive south for me to SEA (ok, so when I have to drive it from 1am-2:30am when I got back, it didn’t seem so great at the time).

There is no hiding that Allegiant love their fees. If you are just flying with a carry-on. don’t care about where you sit  and you don’t eat anything you can get to your destination for dirt cheap. Allegiant has become quite skilled at trying to sell you things during every step of the travel process from going onto their website to getting off the airplane.

Allegiant's new seats have the seat pocket located on the top of the seat.

Allegiant's new seats have the seat pocket located on the top of the seat.

This is not to say I blame them for this, I have always said I do not mind fees. If I am traveling light why should I have to pay for people who are not? When booking my ticket these were some of the “upgrades” I was offered. Some of these fees you do not see on every airline (note that the priority boarding fee is the same for each flight, but the other seat fees will differ depending on flight length):

* Priority boarding: $9.99 – allows you to get on the plane first making sure you have overhead room.
* Premium seat selection: $9.99 – you get an assigned seat near the front or at the exit rows.
* Standard seat assignment: $6.99 – gives you an assigned seat towards the back of the aircraft.
* Online checked bag fee: $39.98 – might be more than the industry average, but you want to pay it online, since it will cost you $70.00 per bag at the airport.

You can fly without having to pay any of these fees, but many will end up paying. Allegiant recently went to a new boarding process. First the people that pay the $9.99 for the priority boarding  get to board. Then those who need a little extra time (not kids or family) that they need extra time getting seated get to board. Next, passengers with seat assignments get to find their seats. Then those who do not have seat assignments, but have kids that are under 7. Then it goes to open seating and people get to pick what is left as far as seats and overhead bin space. On the flight to LAS, there weren’t many who went with open seating, but it seemed most of the plane was open seating on the way home.

Normally I wouldn’t pay for an assigned seat, but on this trip I was flying with my girlfriend Amy and I wanted to make sure we sat together. I didn’t get the premium seats and even after the $32.00 seating fees (for both of us there and back) our tickets were still $50.00 cheaper than the competition. Since Allegiant flies MD-80 aircraft, paying more to sit up front can be more useful since you are farther away from the jets in the rear of the plane.

Got a nice view of Mount Rainier heading south towards Vegas.

Got a nice view of Mount Rainier heading south towards Vegas.

One annoying aspect of Allegiant’s fees is most are opt-out fees. It automatically signs you up for the $9.99 priority boarding and seat assignment charges and asks if you are really sure you want to opt-out. After I thought I opted out for everything and I was on the payment screen and I had “additional charges” adding up to around $60.00 that I didn’t know what they were. It took me a while to realize Allegiant already added two tickets for a hotel shuttle and for travel insurance. I could see people not realizing what is going on and paying for them, even if they didn’t want or need them. Even though it was a bit more work to get the tickets (it was almost game like and I think I won) I still ended up with super cheap tickets.

Although their aircraft are a bit older, the ones I flew on (N416NV & N419NV) were quite clean. The new Allegiant seats are a bit unique with not having a standard seat pocket. Instead of the seat pocket being down by the knees, it is up above the tray table and is much smaller. This allows them to put the seats closer together and cut down on turnaround time since there really isn’t room to put trash.

The new seats are also “pre-reclined,” which is fancy airline-speak for they do not recline. For me, this is a non-issue. I rarely recline my seat out of respect for the people behind me. Non-recling seats allow more seats to be put in, cuts down on maintenance costs, which allows more revenue and keeps your ticket cost cheaper. For some reason, so many people do not see this connection. There are many other airlines out there that might provide a bit more room, less fees and a reclining seat, but it will cost you more to fly them.

Once you are on board the plane, you have more fees to consider paying as well. Unlike most other airlines, there is no free food or drinks. Not even that small glass of Diet Coke or a miniature bag of peanuts. A 12oz soda will cost you $2 and snacks range from $2-$6. Of course you also have the choice of beer for $5 or mixed drinks for $7. Considering I paid $3 for a soda and $5 for a bagel with cream cheese at the airport before boarding, I should have waited.

Boarding on the tarmac at Bellingham allows one to get views like this, which you can't get on a jetway.

Boarding on the tarmac at Bellingham allows one to get views like this, which you can't get on a jetway.

The flight attendants also sell tickets to events and shuttle tickets while on board (at least on my Vegas flight). My biggest regrets of my flight was not getting an Allegiant MD-80 model – which they also sell. They won’t advertise them, so you have to ask for it. I totally forgot on the flight to LAS and was sleeping the entire way back to BLI.

One reason I slept the entire flight back was it was so late. The plane was scheduled to leave LAS at 8:05pm, but we didn’t take off until about 10:30pm. De-icing and flight plan issues caused the delay. Add to that sitting in the plane for about 1.5hrs of that delay with a loud kid in front of us and a group of college kids behind us, it was not fun. At least they did allow us to use our electronic devices and the restroom during the wait. Although it was annoying, what can you do? There are delays in any form of transportation. How many times am I sitting in Seattle traffic and it takes me an hour to go just ten miles (a lot btw)? As always people seem to get angry at the airline for delays; like someone is sitting in a room somewhere making a plane late for fun. The pilots, flight attendants, ground crews, airport personnel, operations managers and everyone else waiting on the last flight of the day do not want the delay anymore than you. These sorts of things happen in a complex business like this and I always find it is best to roll with the punches (although Amy can attest I was getting grumpy at the time).

Allegiant has a smart model that works and they will continue to grow their route map. They own their planes, fly to smaller airports, concentrate on leisure travelers, provide complete travel options and have fees. It obviously is working for them since they have been able to grow rapidly over the past few years and I have a feeling it will continue to work for them. How have your experiences with Allegiant been?

During my time in Vegas, I was also able to take a visit of Allegiant’s head quarters and will be sharing that with you soon. Stay tuned.

Allegiant Updates: Partial Open Seating, ETOPS Delay & First Look at Their New Boeing 757

Allegiant Air Boeing 757 N902NV outside ATS at Paine Field in Everett, WA on Sunday.

Allegiant Air Boeing 757 N902NV outside ATS at Paine Field in Everett, WA on Sunday.

I know, I know, I have posted a lot of blogs not only on Allegiant’s new Boeing 757′s, but also their semi-new livery. What can I say, I love new liveries and new airplane types. Put them together and I can’t resist.

While driving around Paine Field on Sunday, there was a nice treat sitting outside of ATS in Everett: N902NV. Although I was aware that N902NV was at ATS,  I haven’t seen her in person. Previously I wondered if Allegiant’s semi-new livery would look better in person than in photos and I think it does.

Taking a look at this close up photo of the door, you can see there is no interior trim on the door and what looks like wires hanging down from the inside. I assume that the interior has not yet been completed and work should continue at ATS. N901NV, the other Boeing 757, is stationed at Flightstar Aircraft Services in Jacksonville, FL. I followed up with Allegiant again to see if there was any news on these Boeing 757′s and at this time they are still staying silent.

On top of seeing their new aircraft, Allegiant also announced last week that if you don’t pay for an assigned seat, you will end up having Southwest-style open seating.  This will be the new order for boarding:

* Priority Boarding for those that pay $9.99 extra per leg on top of seat assignment fee
* Pre-boards
* General Boarding – those who purchased seat assignments for $6.99 or $9.99
* Families with children under 7
* Everyone else, in order of check in
If a passenger does not board during their specified boarding time, they forfeit their seat assignment. Now, that would be frustrating for a family of 3 that dropped $30 to sit together.

I will be taking my first flight on Allegiant next month from Bellingham to Las Vegas. I have heard you can purchase Allegiant MD-80 models on board the aircraft, you better believe I will be getting one of my own.

UPDATE:
On Allegiant’s SEC presentation they state under a plan to amend the 757 fleet and Hawaii program:
* Operate 757 in domestic mainland, non-ETOPS flying (ETOPS is needed to fly over 60min away from an airport)
* After several months of operational experience, apply for ETOPS
* Target ETOPS approval in 2012

Interesting. Allegiant has confirmed with me that the Boeing 757′s will start flying in mid-2011, but there was no talk about pushing flights to Hawaii to 2012. Is Allegiant just having issues with getting ETOPS certification or does the FAA want Allegiant to get some experience flying the Boeing 757 domestically over land before having them ETOPS certified. I am not sure now, but hoping to find out. Thanks to Dan Webb for finding this.

MORE PHOTOS OF ALLEGIANT 757 N902NV AT PAINE FIELD