Plan Ahead To Limit Airline Fees
RENEE MONTAGNE, host:
If you're planning on flying this Thanksgiving holiday, you may be reeling from all the fees and surcharges involved in simply making a booking. As carriers continue unbundling the cost of flying, the number of airline fees is set to grow. But there is a bit of a backlash, and here to talk about that is David Field. He's the Americas editor for Airline Business magazine. Nice to have you back with us.
Mr. DAVID FIELD (Americas Editor, Airline Business): It's a pleasure to be here.
MONTAGNE: Now, where have you flown lately?
Mr. FIELD: I just came back from Miami, and I paid no fees for one very basic reason, I'm cheap. If you plan ahead and pack very carefully and don't eat on the airplane, you don't have to pay extra fees. There was actually a fair amount of chatter among the people I was sitting with about fees and how people are getting used to them, but how they also hate them. What I find most interesting is people are trying to game the fees, you know. There's a fee for checking a bag. So you get people carrying bigger and bulkier carry-ons. And the flight attendants are not always eager to confront the passengers.
MONTAGNE: Are online ticketers - Expedia, Travelocity, Orbitz - are they doing anything to make sorting through all these fees any easier for consumers?
Mr. FIELD: They're working on it. They've all made the fees more visible, that you see what you're paying. But you don't know what you're going to pay up until the end. Part of it is technology. And one of the very big online travel agencies, Sabre, which is the parent of Travelocity, is about to come out with a tool that basically will let you see what the bottom line is before you commit to buying. And I am sure that we will see the other online travel agencies working toward the same thing.
MONTAGNE: One thing everybody is quite aware of is fuel charges, those charges that get tacked on, on top of the ticket price. Oil prices, though, have dropped by more than a half of what they were this past summer. Why are we not seeing a drop, say, in ticket prices?
Mr. FIELD: Fuel is still exponentially higher than it was under the business plans, under the forecasting most airlines had. It went up radically quickly. A lot of airlines invested in very expensive fuel hedges. Airlines have lost money on some of the fuel hedges.
MONTAGNE: Meaning they thought, let's buy ahead and get a better deal. And they end up having to pay...
Mr. FIELD: Pay 110.
MONTAGNE: It's an enormous amount. And are running on that fuel right now.
Mr. FIELD: That's right.
MONTAGNE: They're still paying the prices, the higher prices.
Mr. FIELD: When we hear $80, they're paying $110 or $120.
MONTAGNE: What about all the other charges. Are they here to stay?
Mr. FIELD: Oh, the fees are here forever. The airlines, first of all, have invested enormous amounts in getting their technology ready for it. They've adopted a new mentality. They think unbundled now, if you will. And for a long time, they didn't. So, no, I don't think the bag fees will go away. I certainly don't think the food fees will go away. And it does provide a great opportunity for one or two airlines to differentiate themselves.
And that's where Southwest Airlines comes in. If you go to their homepage, you're going to see a big ad saying, no fees. Southwest does not charge for bags, it doesn't charge for food, it doesn't charge if you want to sit by the bulkhead. Its fares have gone up. It is not always the cheapest fare. But it's highly competitive, and you're going to see a lot of advertising from Southwest over the next year saying, no hidden fees, no fees whatsoever.
MONTAGNE: So it used to be more legroom, more comfort. Now it's no fees.
Mr. FIELD: That's right.
MONTAGNE: That's a big selling point.
Mr. FIELD: You know, you make a very good point. It used to be that they would give you more. Now the biggest selling point is they're not charging you more. But that's the way the industry is evolving.
MONTAGNE: David, thanks for joining us again.
Mr. FIELD: It's my pleasure.
MONTAGNE: David Field is the Americas editor for Airline Business magazine.