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July 2008
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American Airlines announced today, in an effort to make additional money to offset the ever-rising cost of fuel, it will charge you $15 for your FIRST checked bag, and another $25 for your second, each way. It could add up to $80 in roundtrip fees just for the basic service of getting your bag to your destination. All airlines are struggling to cover the cost of fuel. If oil doesn't come back down to the $100/barrel mark (It's hovering around $128/barrel today), you're going to see a lot of changes and extra charges. But for the airline that was supposed to be "full service," this is a radical change. Charging you more for something even Southwest does for free. My thought has always been, go ahead and charge me extra if the service gives me "value added." For example, Frontier Airlines charges $6 each segment for a personal DirecTV screen. This gives me value added - something more to do while I fly. But to charge me extra for a basic service that is a necessity - that's where I have trouble paying extra. Airlines know fares can't go up too much more without reducing passenger demand. There's a point at which people simply won't pay more to fly - and we're nearing that point. Legacy airlines, like American, United, and Delta, are going to cut major capacity this fall, in hopes of reducing the number of seats they have to fill, so they can raise prices on those remaining seats. They think this is the way to make more per seat mile (the amount they make by flying each seat on each plane one mile - a standard airline measurement of costs/revenues/profits). Then, low cost carriers will add flights where legacies drop out. Low cost carriers will further erode the potential revenue with lower fares. Then, the legacies will cut even more, blaming the low cost guys for putting too many seats on the market. There is demand for air travel right now. Airlines are seeing record load factors - the percentage of seats filled on each flight. People are traveling. There isn't, necessarily, an overcapacity problem. There would be too much capacity if planes were empty. They're not. The legacy airlines have a much different problem. A problem with their business plans. They simply can't compete with the low cost guys on fares. Only a radical change will allow for them to compete, no matter what the cost of oil does. Extra charges aren't the long term answer. Many in the industry believe, as the legacies shrink, low cost carriers eventually carry the majority of domestic passengers. Already Southwest is the country's largest airline in terms of the number of passengers carried. Will fares go up? You bet - on all airlines. The reality of high priced fuel will necessitate higher fares. But charging extra for things that should be considered necessary for the travel experience isn't going to make American profitable again. I want to know what you think. E-mail me at jpenning@kgw.com. 4 CommentsLeave a comment |
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Charging for the first bag is just plain crazy. I make quick trips to see my grandchildren and I once was able to take only a carry on bag. But once the "Liquid Contents" restrictions went into effect, I had to start checking my bag as I could no longer take certain liquid items in my carry on. With all the post 911 restrictions, I adapted by limiting my "line time" by packing one carry on bag. Then I had to change to checking that bag because of liquid restrictions. Now I might have to pay to have that one bag checked. One way or another we are all having to pay the price for the actions of others and we have no voice. How sad.
Here is another reason to love Southwest Airlines!! Southwest is the best. I love them. I'm flying then in 2 months.
I have never been a fan of Southwest and airlines like it; however, lately the low fare airlines are becoming more appealing each day. When the “big” airlines start charging for basic service like checking a first bag, it’s time to rethink my stand on Southwest (and the likes).
I really wonder how legacy airlines will justify charging for checking a first bag while at the same time not accepting responsibility for lost/stolen items in those bags. All too often valuables come up “missing” from checked bags – it happened to me before and millions of others – yet airlines have it written in fine print, they are NOT responsible for lost valuables. Go figure!
Bottom line is it adds up to pay more, get less...
…Amtrak & Greyhound are starting to look better and better each day.
As an airline employee, I am very frustrated by the nickel and diming of the average passenger these days.
The problem is that people by airline tickets based on price 90% of the time. Airlines can't simply raise fares to cover their expenses. They operate at such small profit margins, on average 2-3%. So the decision to add all of these new "fees" is the only way that any airline can make a profit.
Get used to it folks, because until the federal government gets off its duff and re regulates this industry and closes all the loopholes in the bankruptcy laws, it will only get worse.