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Airline fees: the sky is the limit

Jane Engle
February 13, 2013
airline fees
<p>Hot Pants</p>

U.S. airlines are in a fee frenzy, as a new chart from Airfarewatchdog.com shows: $150 to change a ticket, $100 to fly as an unaccompanied minor, $35 or so for a window or aisle seat. No wonder the industry hauls in more than $12 billion a year from fees and other so-called ancillary revenue, by some estimates.

The latest target is carry-on bags. Low-fare upstart Spirit Airlines, which pioneered cabin bag fees, recently raised its top charge to $100. Last year, Allegiant Air started charging too. It’s not just the money that motivates these moves. It’s the drive to reduce delays. With fewer carry-ons to juggle, boarding is a breeze and planes get off the ground more quickly.

Major airlines “would love to institute carry-on bag fees,” says George Hobica, Airfarewatchdog president. What’s stopping them? Customer pushback may not even figure in. “If you have to fly, you have to fly,” Hobica says.

Instead, company bean-counters worry that they would have to hire more staff to handle an avalanche of checked bags and pay out more to settle liability claims for damaged and lost luggage, he says. Still, the extra revenue is tempting. So stay tuned.

Of course, for fliers, just tallying up the fees can be a huge hassle. Airfarewatchdog’s chart categorizes 14 charges, on everything from phone bookings to blankets, at 14 U.S. carriers.

So airlines have devised an answer for the math-challenged: bundles of fees that are “baked” into certain fares or that you can buy as upgrades. Packages make passengers feel less ”nickel-and-dimed,” Hobica says, and also benefit airlines by driving customers to book on their websites, which display the packages.

Frontier Airlines’ Classic Plus fare, for instance, covers the costs of roomier seats, checked bags and itinerary changes, among other perks; the cost varies. American Airlines recently introduced a Choice Essential fare (an extra $68 round trip), which waives changes fees and gives you a free checked bag and early boarding. For $20 more, you can get all that plus free same-day standby and same-day flight changes, an alcoholic beverage and extra frequent-flier miles.

"These travel options are another example of how we're building toward a new, innovative and more modern airline," Rob Friedman, American's marketing vice president, said in a news release. And indeed, Hobica says, “That’s going to be the way of the future, to bundle these perks into a fare as opposed to fees.”

But wait: Didn’t airfares used to include free checked bags and so much more?

Fasten your seat belts, fliers. Looks like we’re headed back to the future.