In the good old days, when you purchased found cheap fares, be they cheap airplane tickets or cheap vacation packages you knew that you were getting a good deal. In the last 18 months plane tickets have gone from being an all inclusive purchase to a pay as you go plan that has upset many customers.
Airlines point to the following factors when saying that they need to stay with ancillary charges:
Over the last decade the airline industry lost $55 billion. Losses are projected to continue in 2010.
Hotels charge different room rates depending on location and amenities. Why not the airlines?
Recent American Airline surveys showed that over 50 percent of their customers understood why American charges for things that used to be free.
Airline prices were increased 15 times in 08 to offset record fuel costs. In 09 airlines only successfully raised prices four times because the recession contributed to air travel dropping by 25 percent.
From July to September in 09, the average round trip domestic fare was $306, 15 percent less than one year ago when it was $358.
In 2010 both attempted price increases failed because discount airlines did not match the higher prices.
Interestingly, the airlines have found that it is much easier to add and increase fees. Checked bag fees increased 50 percent in 09, with total baggage and other fees generating $3.8 billion in revenue.
Some travelers do not have a problem with most fees since they would rather see people pay for services that they use, such as checking bags and requesting pillows and blankets. The alternative is for everyone to pay for these services, regardless of whether they use them.
Where passengers get more upset is when airline start charging for premium seats. Initially such seats were usually defined as exit row or bulkhead seats. Now that definition is being expanded by some airlines to include all aisle seats. Ultimately will the only non-premium seats be center seats?
The airlines can expect to become increasingly creative when it comes to coming up with new charges to try to bring the industry back to profitability. How soon do you think that airlines will start charging for carry-on bags?
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