Department of Transportation

  • May 4, 2010
  • The U.S. Department of Transportation yesterday said airlines’ revenue from so-called ancillary fees rose 42 percent to $7.8 billion in 2009.  This includes the fees you pay to check baggage and change reservations, the challenges most familiar to the business traveler.

    Rather than simply increase ticket prices, which would be the fairest approach to increasing revenue because funds would be raised equally from all passengers, the airlines decided in 2008 to nickel and dime passengers when fuel prices rose to silly levels backed by $147 per barrel oil prices.

    The ancillary fees apply to the normal costs of doing business that the airlines cannot afford to absorb because their margins are so narrow, so they pass on costs to travelers.  You might say this is appropriate and that if someone changes an itinerary they ought to bear the cost of the change.  Right?

    I suppose I can agree with charging reasonable fees to change flights but recent experience tells me the cost of making a change is somewhere between forty and sixty percent of the ticket price.  Give me a break!  Changing a reservation ought to be a right we all have borne by all of us as a communal good because we all need to change flights from time to time.

    Also, there’s the matter of checking bags.  We’ve become addicted to carrying on our bags to save time on landing and to avoid checking fees.  But the hard math says that there isn’t enough overhead bin space to accommodate all those who wish to carry on.  So what happens?  People with low zone seating numbers get on the plane first and take the available space.  That means if you have a bag and are boarding in Zone four, good luck.  Don’t even expect room for a briefcase or a coat.

    The inequality of all this is evident.  We all pay the same rate for a seat but some people get more amenities while others have to buy amenities.  Airlines have become proficient at doling out amenities to their best customers.  Someone with special status due to an abundance of frequent flier miles on the books gets to board early, regardless of the zone that would otherwise be called for.

    There is a work-around for this that will hold until the airlines install credit card processing at the gate.  Simply bring your bag to the gate and then check it when the gate agents discover to their surprise that there are too many people carrying on.  At that point the airline is happy to gate check your bag gratis just to get to push back on time.

    Economists have a term for messing with the overhead bin space it’s called the tragedy of the commons.  What was once common area available to all is now commandeered by the powerful for private use.  It’s wrong, wrong, wrong and it’s not how you treat customers.  What’s annoying is that government regulators enable this kind of thing to the tune of hundreds of millions of dollars per airline in many cases or $7.8 billion in 2009.

    Is it any wonder why so many travelers have nothing but dread and simmering anger for air carriers?

    Published: 14 years ago