Surprisingly Southwest Airlines made bank off fees in 2009
According to the Bureau of Transportation Statistics (BTS), US airlines made $7.8 billion in fees in 2009. This is a 42% increase over 2008. BTS says in a release “the airlines collected $2.7 billion in baggage fees, $2.4 billion from reservation change fees, and $2.7 billion from other ancillary fees, such as pet transportation fees and frequent flyer award program mileage sales.”
Delta brought in the most money with $1.65 billion in fees and surprisingly Southwest was fourth. Southwest might not charge for bags, but they do charge for other services like pets, unaccompanied minors and an early check-in option. Even before Spirit Airlines started charging for carry-ons, 21% of their total operating revenue came from fees — the highest of any other airline.
$7.8 billion is a lot of money. Passengers keep complaining about fees, but it is obvious that they keep paying them. I am not going to be surprised if more creative fees start showing up in the next few years.
Source: USA Today Image: TVL1970
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Photo taken when I put Alaska's guarantee to the test!
Airline fees are not very unique anymore. It takes a bit more than a fee change or new fee to motivate me enough to write a blog on it (like charging for carry-ons). Why does Alaska Airlines and Horizon Air get a blog on fees?
Not because they are raising some fees (1st checked bag from $15 to $20) or that they are lowering others (2nd checked back from $25 to $20, 3rd from $50 to $20), but because they are making their from plane-to-you bag guarantee even better.
Previously if you checked a bag with Alaska or Horizon, they guaranteed your bag would reach the baggage carousel 25 minutes or less from the time your airplane made it to the jetway. Now that they are raising the prices for some passengers, they are improving the guarantee to only 20 minutes.
If your bag doesn’t make it in 20minutes, you can either get $20 off your next flight or 2000 miles (I vote take the miles). A while back I put their guarantee to the test on a flight from Seattle to Phoenix and my bag made it in just over 15 minutes.
Yea, fees are annoying, but they aren’t going away. At least one airline gives you something extra with your baggage fees!
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Spirit Airlines Airbus A321 with unique Blue/White livery
When I first heard this story I thought, “oh yes, I get to award another ‘Crazier Than Ryanair‘ medal.” However as I learned more about Spirit Airline’s new carry-on fees, I wonder if it is really all that crazy?
If you have missed it, Spirit Airlines is looking to charge passengers for carry-ons. There has been a lot of coverage of this, but here are the facts of the new carry-on fees:
* They start August 1st, 2010
* Spirit will be the first airline to charge for carry-on bags
* Your one personal item can go under your seat and is free
* It will cost $45 at the airport, $30 online and $20 for club members to have a carry-on in the overhead bin
Is this THAT crazy? Maybe not. If you have flown in the last few years you might have noticed how HUGE passenger’s carry-on bags have become. Three bags and one bin is totally full. It becomes a rush to the airplane to make sure you get space in the overhead bin. These fees would limit the number of people having a carry-on and would probably guarantee space for everyone who wants it.
Weight costs money. Airlines have been looking at ways to offer a basic ticket which will get your body from one destination to another and anything else going with you will cost money. It was only a matter of time before an airline [Ryanair anyone] would try something like this.
People will still pay. Passengers complain about new fees, but when it comes down to it, the fees make airlines a lot of money. Passengers might say they will never pay the carry-on fee, but when they are confronted with Spirit Airlines possibly having the cheapest fares, they don’t think twice. If passengers weren’t willing to pay these fees, airlines wouldn’t have them.
Yesterday Transportation Secretary Ray LaHood voiced his opposition to Spirit’s new fees. “I think it’s a bit outrageous that an airline is going to charge someone to carry on a bag and put it in the overhead. And I’ve told our people to try and figure out a way to mitigate that. I think it’s ridiculous.” FlyersRights.org also voiced their opinion that the government should step in and stop the madness of the airlines.
I am sorry, but this just angers me. The airlines were rightfully deregulated in the United States long ago and run via the free market. If passengers really don’t want to pay the fees, they won’t and Spirit will lose money and change their policies back. Airlines just don’t make up rules and policies in a vacuum that aren’t influenced by customer demand.
Yes, if the fees were not clear and were hidden, I could see the government stepping into make sure an airline was not deceiving passengers, but if you look at Spirit’s website (or been watching the news over the last few days), it is quite obvious what the fees are for.
Personally do I want to pay these fees? Heck no! But if I am flying somewhere and Spirit has the cheapest (even with paying the fees) will I care what my money is paying for? Probably not. It will be very interesting to see how this all works out.
Image: vnvlain
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Tail of an American Airlines Boeing 777
With so many fees coming from airlines, it is difficult for one to catch my eye anymore. I have come acustomed to them and realize they won’t be going anywhere anytime soon.
Now, American Airlines will start charging passengers to fly stand-by. Previously if a passenger got to the airport early and there was another flight leaving, they could catch the earlier flight for no additional charge.
That model makes sense. You already paid to fly on the exact route, there is an empty seat on the flight before yours, why shouldn’t you be able to cut down on your travel time a little bit?
Any ticket bought after February 21st, passengers will have to pay an additional $50 to fly stand-by. However, American Airlines states this is more than just making some extra money.
“You get one of those Friday afternoon scenarios when you have more than 100 people standing by for a flight out of a business market.It really does become chaotic getting everyone processed. You have to process each and every one of these people individually. Those who don’t make it, then you have to roll them over onto the next flight and start it all over again,” Tim Smith, American Spokesperson said.
Smith states that getting a lot of people on an earlier flight, can delay flights. He stated that “Premium” (Executive Platinum, Platinum and Gold members of the AAdvantage frequent-flier program and passengers flying business or first class) passengers and their guests won’t have to pay anything additional. He also admits this is not just to cut down on rare stand-by related delays, but to make additional revenue for the airlines.
The additional $50 ticket-change charge has been around American since 2005 and flying stand-by has always sort of circumvented the fee. Are passengers going to pay this new fee? If history shows us anything, yes they will. Will it be worth $50 to get home a few hours earlier? Probably depends on the situation and if the airport has a good bar.
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Source: The Gazette Image: little j photography
Ryanair Boeing 737-800 in March 2005 showing off the airline's first winglets
Normally one has to take whatever Ryanair CEO Michael O’Leary says with a grain of salt. He says a lot of crazy things, most likely to get a few news stories written about him. When he first started talking about charging passengers to use the bathroom, I thought it was another crazy publicity stunt, but…
Ryanair plans to add credit card readers to the bathrooms in their Boeing 737-800 jets and even remove two of the three bathrooms to provide more seats. O’Leary is quoted as saying, “We are flying aircraft on an average flight time of one hour around Europe.” Is it crazy for this to start making a little sense to me now? I mean, some people ride buses and trains without bathrooms for longer than an hour on a daily basis.
The airline plans to charge about $1.50 for each bathroom usage and no word on emergency situations for people without credit cards. They plan to have the new system in place within 2 years.
Source: NYT Image: jordi757