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Fees passengers hate actually make sense
I honestly don't have much of a problem with all the extra fees being tacked on by airlines. They have an obligation to their shareholders to deliver results: it's a fact of life. And, realistically, they don't do us any good if they can't afford to put planes in the air. But, I suspect I'm in the minority on this one. A recent online poll by Airfarewatchdog.com sought to learn which fee passengers hate most and found that 52 percent abhor having to pay to pick a seat. Only 14 percent had a problem paying for snacks. A mere 3 percent (my kindred spirits, I guess) said they were happy to pay for extra services.
George Hobica, Airfarewatchdog.com's president, observes that passengers are more tolerant of fees that come with an added expense to the airline. If you want a meal, someone has to pay for it. Sure, you're going to pay more than the airline does – as you should – but there's an understanding that the airline is picking up part of the burden. With seat assignments, he believes, the fact that there is no incremental cost is what irks passengers.
I see Hobica's point, but there's an opportunity cost for the airlines that isn't readily seen by the average passenger. If there is a place for a fee that the airline doesn't use, it's potential income that can never be recaptured. Sure, there's no additional cost to be covered, but there is the reality that the airlines aren't monetizing something that could ease the pressure on their financial statements.
There's a good reason for every additional fee you're seeing: airlines don't have a choice. Rather than push up the prices, this a la carte approach allows passengers to decide what's important to them. Why pay for a meal you won't eat ... or for a "better" seat that won't make a difference to you?
Filed under: Business, North America, United States, Airlines
Reader Comments (Page 1 of 1)
Dhalver Xeno Mar 13th 2010 5:41PM
I understand opportunity cost, but where do you draw the line? How about...
$10 extra for an aisle seat, $5 extra for a window, and $2 extra for a middle seat?
$15 to get priority boarding (without a club tier membership) and another $15 to get priority exiting?
$20 to have priority luggage in that your luggage comes out on the conveyor first?
$20 to activate your personal seat entertainment. But that $20 is for the "basic" channels. Another $20 gets you the premium channels. Oh and by the way, the newer movies cost $3 each. Just swipe your credit card to activate your entertainment system.
$5 to have your entertainment system screen show your current position in the air.
$5 to have priority meal service (you get fed first) and another $5 to have priority meal clean up service.
I could go on and on and on...
Slappy Mar 13th 2010 5:28PM
Here's my problem with fees:
If it costs $1000 to fly me across the country (5'10", 220lbs - should be 185, have a small carryon and one piece of check luggage), then charge me $1000.
Don't charge me $500 and then try to claw the other $500 back through fees.
I'm not saying they can't charge for things like entertainment sets or how some airlines (at least used to) offer a "upgrade each leg for $75 if we have seats" thing. That's fine, those are options and can be viewed as profit increase tools.
The rest is the cost of doing business, so charge me what the seat costs.
Tom Johansmeyer Mar 13th 2010 6:02PM
@Dhalver Xeno, I understand where you're coming from and agree that there's a lot of potential for these practices to be taken to absurd levels (which Ryanair seems to be committed to doing). Where does it end? Well, it ends with you, with me and with every other airline customer. Ultimately, demand is what sets fares, and in this market, there's no reason for airlines to charge much. Seats are going empty and routes are being cut to alleviate cost pressures. So, the airlines have to look for anything else they can find to bring in some extra cash. In a way, these extra fees, for the airlines, are the corporate equivalent of getting a paper route. It isn't going to pay the rent, but the little bit extra can help get them out of a bind.
Scott Carmichael Mar 13th 2010 8:00PM
Here is what doesn't make sense to me:
A low cost carrier (take for example Southwest Airlines) is able to provide free checked luggage, but a legacy carrier like United Airlines are not.
If the fees ended there, I could understand - but on some of the legacy carriers, you now have the following fees:
Exit row fee
Checked baggage fee
Elite security fee
Pre-boarding fee
Premier seating fee
Paid food and premium beverages
Seat pre-selection fee
And then there are the various "yearly memberships" to things like unlimited checked luggage, premier security lines, economy plus seating and more.
The question of "where will this end" is a funny one - because airlines are really creative. They have obviously taken a close look at how their customers are falling for this crap, and just keep on inventing new fees.
tom.johansmeyer Mar 13th 2010 8:08PM
You know the drill, Scott-- either cut expenses or charge more. The low cost carriers like Southwest have done a better job of managing expenses. Big carriers have different expense models and can't cut all they'd like. I wouldn't mind seeing airlines go straight a la carte. Maybe the flight would cost $10, and you could choose to add a seatbelt, life jacket, oxygen mask and cushion. Then, if you're really decadent, you could choose to spring for the instruction card or tray table. Want the safety briefing? $5. Overhead light? $3.
Hey, why not?
You're absolutely right: when it comes to finding fees to create, the airlines are creative. But, of course, necessity is the mother of invention. Obviously, there are some serious flaws in how many of the airlines are run-- from workforce management through customer care. Rather than make the big changes, they can charge you for a carry-on. Band-aids are awesome.
Scott Carmichael Mar 13th 2010 8:33PM
I know the drill - but don't let that stop me from complaining about it :)
et Mar 14th 2010 7:35AM
This is how I see it: the fundamental service of an airline is to get passengers (and reasonable amount of their luggage) from one city to another without any excessive discomfort. Everything that is crucial to this process should be covered in the base ticket price. This includes being able to check one or two pieces of baggage, basic meals to keep you from starving on long flights, and even blankets if the cabin temp in the air is unreasonably cold. This also includes ensuring that passengers can reserve seating next to other members of their party - they may not be able to pick where on the plane they sit, but at least they know they'll be sitting together.
Everything else --express boarding, snacks, exit row seats, movies, extra baggage, etc- could justifiably come with a fee. Sure it would suck, but I'd be willing to deal with it in order to keep the base ticket price as low as can be. And most importantly, no one would have to pay a penny more than the ticket price if they didn't choose to do so.
Point is, some fees are fine. Everyone should be able to avoid paying fees if they are willing to sacrifice on perks, but not on necessities (like luggage!).
Crissy Mar 14th 2010 10:30AM
I totally agree with opportunity costs and that the airlines are there to make money for stock holders. In line with that I don't mind paying fees for some things, but at some point I think the airlines start to alienate their clients and make the low cost carriers like Jetblue and Southwest better alternatives even if the flight costs more.
What should be included in the price of a ticket:
1 piece of luggage, I think that's pretty basic and makes the boarding experience better for flight crews and passengers.
A drink if your flight is an hour or more
A meal if your flight is 4 hours or more
I'm on the fence about the seat selection thing, there are some real issues with it. If it means that I'm being separated from my traveling companions (particularly children) then that's not much of an optional fee. If my seat gets changed or the aircraft changes or someone asks me to switch do I get my money back?
If I'm paying for a movie I want to watch it when I want to. I'm not sure how many of the pay for movie options work, but if it's like some of the free systems where a movie starts and then just reruns on that channel throughout the flight then I'm not interested in paying.
I don't mind charging for (since they are more luxury types of things):
exit row seats
priority boarding
express baggage delivery so it comes out first (I just tip the curb side check in guy well and that usually works too)
food on shorter flights
Matt The Intern Mar 14th 2010 1:07PM
Personally, I would rather the airlines go to a "tier" service much like packages on a cruise line, when you fly. You certainly could buy the "Classic Coach" package, but you'll get no food or drink (except where prescribed by law), no entertainment, no magazines or newspapers, and who knows, maybe your light and air won't work either. Then there would be higher grade packages like "Coach Plus" and "Coach Elite", all the way up to your standard "Business" and "First Class" packages. Each tier would obviously have more amenities.
The point I'm trying to make is: don't nickel and dime me. If you want me to pay more, fine, but make it an up front cost where I know what I'm getting. Spell it out in black and white for me so if I want to fly steerage, I can prepare myself emotionally for it.
There's a reason why Crystal Cruise Lines is so damn expensive, but so plush. They charge you a boat load up front, but you can sup on caviar and pound Sapphire martinis for days on end, whereas RC is cheap, but you get what you pay for. Just let me choose my experience before I get on the damn plane.
Air travel is stressful for the average person, and when they have to constantly be running their credit cards to load bags onto the plane, get a soda, or not have the isle that doesn't recline, it adds to that stress, and make passengers hate flying more and more.