Click here to read their article and download the Airline Fee Guide.
Click here to read their article and download the Airline Fee Guide.
Airlines continue to implement new ancillary fees and increase charges on existing fees. It’s important for companies to update their expense policy to address these costs and equally important for travelers to be aware of what their company will, or will not, reimburse.
IdeaWorks Company recently released a study of airline ancillary fees which has sparked a couple of interesting articles worth reviewing:
There has been a significant amount of press regarding the Department of Transportation’s new regulations that now require airlines to advertise full ticket prices on websites, including all government taxes and additional fees. But did you know that public online booking tools can sneak their booking fees into the “additional fees” category?
This is to say–service fees are not always listed clearly for the consumer. In many cases, the service fee is only mentioned in the fine print. Charges under “government taxes and additional fees” are not inclusive to fees imposed just by airlines. And online service fees can range anywhere from $6.99-$10.99 for simple domestic fares up to $50 for deposits on air, hotel, and car rental “packages.”
One public online site charges $30 per ticket any time a customer needs a ticket reissued. And in some cases there is a “Processing Service Fee” that a company will retain to compensate themselves for the processing of your travel reservation through their systems.
Bottom line: The proof is in the fine print. Don’t forget to read it.
Have you ever seen an advertisement for what you thought was a “cheap flight,” only to click the link and find that it’s actually much more expensive than you initially thought due to all the fees and taxes?
In a new set of regulations, the Department of Transportation (DOT) will now require airlines to advertise full ticket prices, including any government taxes and additional fees, when those prices are advertised or first shown on websites. The DOT will also require airlines to post baggage fees more clearly on their websites.
These rules are the latest in consumer-oriented regulations imposed on airlines by the Government. At present, passengers often don’t see the full ticket cost until the booking is made and paid online. The intent of these rules is to make ticket prices more understandable for consumers by providing greater transparency and better opportunity for price comparison. Additionally, the new regulations will also require that airlines give the consumer 24 hours to change their reservation without having to pay a rebooking fee.
However the airlines say it’s unfair–that consumers are used to having taxes added at “the register,” and that it prevents them from showing the consumer just how much of the ticket price belongs to the government.
What do you think?
Last month the Transportation Department imposed a rule that requires airlines to disclose all fees for optional services with a prominent link on their websites. They also must disclose bag-fee increases on the home page or through a link on the page. This new ruling made the annual USA Today airline service fee survey easier than ever and disclosed the following excess baggage fees which exceed the $400 mark.
Per the USA Today survey: For an overweight checked bag weighing 71-100 pounds, Continental Airlines is charging $400 on most international flights, and American Airlines is charging $450 on its Asian flights. United Airlines charges $400 for checking bags weighing 71-99.9 pounds on flights to another continent.
The airlines say fees keep airfares low, help cover costs and let fliers choose the services they want. Just be sure you pack light when traveling internationally!
I attended a webinar this week and was thrilled to discover what I think is a great step in the right direction when it comes to identifying and clarifying some of the extra costs of airline travel today. If you have the right credit card, you can now receive reports through AirPlus International on award fees, baggage costs (first bag, second bag, etc.), services fees (upgrades, standby, bulkhead etc.), onboard charges and miscellaneous charges. AirPlus is certainly taking this subject very seriously and even though it is not a perfect solution, it is the best one out there today.
“The AirPlus Ancillary Fee Reports are designed specifically for corporate travel managers to gain insight into airline ancillary fees! AirPlus is the first payment provider to offer such clarity.
A set of five detailed reports are available monthly for AirPlus Corporate Card customers and are based on a company’s card data. These reports are compiled using reporting data sent through by airlines and include hundreds of different fee types! Gain control over these fees with the transparency that AirPlus brings with these new reports.”
These reports include robust details for further data mining and reporting. They include the type of fee, the airline, the ticket/document number of the fee, the passenger name and amount. This data is useful for budgeting a company’s future travel program spend and may prove useful in supplier negotiations.
Consumer Reports evaluated 10 of the nation’s biggest airlines; evaluating them on: check-in ease, cabin-crew service, cabin cleanliness, baggage handling, seat comfort and in-flight entertainment.
The ratings broke favorably for low-cost carriers, which took the top five spots in the Consumer Reports ratings. Not so good for the five traditional legacy carriers, which took the bottom five spots.
Are there service fees you would be glad to pay an airline? Here are the top five service fees people would be happy to spend their hard-earned money on.
1. Priority Takeoff. Yes, we know the airline has no control over how quickly its planes are allowed to take off. But what if – and this is strictly hypothetical – the airline could pay the tower to push its planes to the front of the line, and then pass the cost of that bribe on to the passengers? I think most passengers would be willing to scrounge up an extra $20 if the alternative were spending two hours waiting to get onto the runway.
2. Expanded Movie Selection. It’s awfully nice of the airlines to offer a selection of movies for in-flight entertainment, but you’re often stuck with a limited selection of family-friendly fare. (Even though the dancing-penguin movie makes us all want to cuddle and eat smores a flight spent with Marilyn Monroe or Marlon Brando might make the flight more…well… enjoyable). What if you could pay $5 to have your pick of any film in the Netflix collection? It would make a long flight a little more bearable if you could watch a movie you actually wanted to see.
3. Buffet-Style Meals. Now that all the airlines charge you extra for in-flight meals anyway, it’s only fair that we get a little choice in our food. So instead of paying a fixed fee for a tray with fixed portions of entrees and sides, why not set up a small buffet in the galley and let passengers pick and choose which items they want on their plate?
4. Cockpit Visit. Remember when you were a kid, and you got to go visit the pilot in the cockpit and see all the awesome buttons? That all went away after Sept. 11, but I’m sure there are some well-off folks who’d be willing to shell out to let their kid have the same experience. Our proposal: Make the parents pay to have a second air marshal on the flight who can escort the kid to the cockpit and make sure he doesn’t hijack the plane.
And my favorite….
5. Priority Disembark. It’s one of the worst parts of flying: You finally finish your flight and taxi to the gate, then have to wait 15 minutes while everyone in front of you stands in the aisle getting their carry-on luggage. What if you could pay a fee to cut to the front of the line? Imagine this: “Thank you for flying with us today. Please remain seated until our priority guests have had a chance to retrieve their belongings and exit the airplane.” Of course, any non-paying guest who tried to make a break for it would be tackled by the air marshal.
You either hate them or accept them, but for the most part airline ancillary fees are here to stay. When I look at the larger picture, it’s definitely worth the additional $10 to $100 to fly instead of drive to a destination that would normally take more than 6 hours and up to several days to drive. To help make the translation of service fees a bit easier, the USA Today Travel section posted a very helpful list of airline fees on March 10th. Check it out and let me know what you think. Do fees make you want to drive instead of fly?
With the dreary forecast of rising airfares and additional and increased ancillary fees, I was pleasantly surprised to read that hotels are coming to the rescue. I recently saw that two hotel chains are offering a program in which they reimburse you for your checked baggage fees. The Kimpton hotel chain and Intercontinental Hotels are offering programs for a limited time that allow you to submit proof of fees for reimbursement. There are some restrictions and minimum night stays, but this is a great way to recoup some of your expenses and enjoy a little extra spending money. Check out their websites for additional information!
In the beginning we may have been caught off guard by ancillary fees charged by some of the major airlines, Delta, United, Continental, American Airlines and others, but what is happening now? Are we learning to accept them, ignore them or just plain hate them?
According to a study by ProMedia Travel, many corporations are reporting that anywhere from 5% – 15% of their corporate travel budgets have been consumed by airline ancillary fees. What appears to have happened is that many airlines have ‘unbundled’ their fees, but have not lowered airfare. Consumers are okay with paying fees for items or services that add value to their travel experience, however, they are not okay with paying fees for what use to be included in the cost of their airline ticket such as baggage fees. Checking baggage is an essential part of travel and most people feel should be included in the price of the ticket, the quoted price by the airline, which it isn’t.
Several carriers, such as JetBlue and Southwest, are charging additional fees, but these fees are for services that add value while fares remain reasonable and a checked bag is included. This has allowed these airlines to generate revenue while at the same time keeping their customers happy. JetBlue does this by charging additional for seats with extra leg room and their TruBlue program has no blackout dates, you can use points to book any seat on the plane, points don’t expire and change and cancellation fees are reasonable. Though the boarding process with Southwest can be challenging at times, their philosophy is similar, they don’t charge change or cancellation fees and neither airline charges for the first checked bag, and they use this as a very effective advertising tool. These airlines are actually turning million dollar profits while the major carriers are reporting multi million dollar losses. When will the major airlines realize that there is something to be learned from JetBlue and Southwest Airlines?
We don’t necessarily need to become a prisoner to ancillary fees. Travel managers can try using the increased cost of doing business with the airlines as a tool during contract negotiations. The Department of Transportation could make a ruling mandating that airlines display what every passenger considers to be part of a reasonable airline ticket, and then allowing us to ‘opt out’ of items like a first check bag.
These days, airlines are charging a fee for everything – Luggage, snacks, entertainment, onboard Wi-Fi, even blankets and pillows! Here’s what to expect from the top domestic carriers.
|AIRLINE||LUGGAGE||SNACKS & MEALS||ENTERTAINMENT||WI-FI||BLANKETS & PILLOWS||PHONE BOOKINGS|
|Air Tran||$15; $25||$1; $6||No Fee||$7; $12||N/A||$15|
|Alaska||$15; $25||$0; $6||$6; $12||N/A||N/A||$15|
|American||$20; $30||$0; $10||$2||$7; $12||No Fee||$20|
|Continental||$20; $30||No Fee||$1; $12||N/A||No Fee||$15|
|Delta||$15; $25||$2; $8||$2; $6||$7; $12||No Fee||$20|
|Frontier||$15; $25||$3; $6||$0; $8||N/A||N/A||$25|
|JetBlue||$0; $30||No Fee||$5; $15||N/A||$7||$15|
|Southwest||No Fee||No Fee||No Fee||N/A||No Fee||No Fee|
|United||$15; $25||$6; $9||No Fee||$12||No Fee||$25|
|US Airways||$15; $25||$3; $7||$0; $5||N/A||$7||$25|
I thought I would discuss some changes that are happening in the industry that you may or not may be aware of.
For example, Qantas has announced that starting in June, 2009, qualified individuals may be assured of getting an exit row seat by paying a fee. On their long haul flights, such as Los Angeles to Sydney, the fee will be $150.00 in each direction. That works out to be a little more than $10.00 an hour for a little extra space. One does have to meet all the usual requirements of being between 15 and 65, able and willing to follow directions and be able to assist in case of an emergency. The interesting aspect of this to me, pricing aside, is that according most reviews, the exit row seats on the 747-400s and Airbus 330-200 are actually undesirable seats that lack storage space and are frequently uncomfortable due to the fact that there are fixtures that reduce the amount of room in the seat. The only aircraft that it seems to make any sense to spend money for an extra row seat is the Airbus 380 and then only if you are getting the rear most exit row. And even then you are seated next to the self serve bar so you will have people standing in the area that you paid extra for.
As you can see, I’m not sure that’s a great deal.
Then there is the Air New Zealand Promotion, it’s a Matchmaking Flight. The idea is to help Americans and Kiwis to meet and mingle and to find that special someone. One can opt for a pre-flight party in Los Angeles, the flight and then the Great Matchmaking Ball a day after arriving in New Zealand. So if you are interested in meeting that special Kiwi, this might be the deal for you.
Then came the news that Delta will start charging a $50.00 fee to check a second bag on international flights between the USA and Europe. This will apply to all passengers who aren’t at least Silver Medallion or higher or members of the US Military traveling on orders.
The one constant in the travel industry is change so I’m sure that we will be seeing more change every day.