Would you pay a fee to avoid paying a fee? American Airlines thinks so

Fees on top of fees.

It used to be the kind of hyperbole with which I spiced up my columns. But now, thanks to American Airlines, it’s real.

The airline this morning introduced something called a Boarding and Flexibility Package that allows you to pay a fee and get priority boarding, offers a $75 discount off a change fee, and lets you standby free for an early flight that day.

I’m not making this up, folks. American is allowing you to pay a fee to avoid paying a fee.

And before you say, “Fees gone wild!” let’s get to the fine print.

• Places you in Group 1 of General Boarding, which allows you to be one of the first groups to board the plane for your flight. (Group 1 boards immediately following PriorityAAccessSM customers).

• Provides a $75 Flight Change Discount, which means that if you need to change your itinerary, you’ll save $75 off the regular service charge when applicable.

• Allows you to standby for an earlier flight on your day of departure at no charge.

• Applies to all travelers in your reservation per-person charge.

How much does this cost? The introductory pricing looks pretty affordable, for now.

$9 for Dallas/Fort Worth to Kansas City, Mo.
$14 for Chicago O’Hare to Boston
$14 for Dallas/Fort Worth to Orlando, Fla.
$14 for Miami to Washington, D.C.
$19 for New York JFK to Los Angeles

This looks to me like a version of Southwest’s Early Bird program. Call it Early Bird plus.

Dan Garton, American’s executive vice president of marketing, is thrilled by this new ancillary revenue opportunity.

We’re excited to offer customers options to tailor each travel experience to their preferences. Our customers appreciate value and convenience. With American’s Your Choice services, we’re able to further enhance the services we deliver to them. And we are hopeful of adding more Your Choice offerings in the future.

Hopefully not, Dan.

This is as bizarre a move as charging for the first bag, which American Airlines pioneered. Any other bright ideas, guys?

(Photo: boeing dreamscape/Flickr Creative Commons)

  • Ed in Philly

    Greyhound is looking better and better.

  • http://www.twitter.com/claystorm Kevin Murray

    Now all we need is a baggage fee to avoid paying for the baggage fee. lol. Actually, if I know that I am going to need to change my ticket, it looks like a decent way to save some money in that department.

    One thing it does mean, with the priority boarding, is you will get first crack at the overhead bins once on the plane. Now granted, if everyone starts to pay for this service, then group 1 of boarding is going to get very large, very fast.

    This does clear a few things up, like why AA stopped allowing people to travel standby a little while back. Should have known they were going to wrap it in to a fee.

  • Carver

    I think we have to see what American is really doing. It’s cutting out the trip insurance folks. Instead of buying trip insurance from a third party that American only gets a small cut, American is effectively offering a form of trip insurance, while sweetening the proverbial pot by adding other benefits which don’t necessarily cost American anything, e.g. priority boarding. This way American keeps all of the money for itself.

    This is analogous to the time I flew from SFO to LAX and the cheap fares were gone. I had a choice between “deeply discounted” $125 fare with tons of restrictions, or a regular fare of $135 with no restrictions. I opted for the higher fare, effectively paying $10 as an insurance policy.

  • Arizona Road Warrior

    United Airlies has Premier Travel which is similar to this new AA program.

    In addition to Premier Travel, UA has Premier Travel Plus; Premier Line
    Premier Baggage; Economy Plus one-time option; Economy Plus annual option; Economy Plus with Red Carpet Club and Economy Plus with Premier Fast Track.

    IMHO, there are two problems.

    The first problem is an unlevel playing field. To be honest, the legacy airlines can’t compete with Southwest, Air Tran, Frontier and the other discounters because of their business models. The legacy airlines have a hub and spoke system where the smaller cities feed passengers into the hubs. Southwest and the other discounters have a point-to-point system…to be accurate, Southwest has a hybrid point-to-point system.

    The discounters are flying routes that are popular and have the most passengers. This makes sense…if I was starting up an airline, I will do the same. Why fly between Ten Buck Two and Ten Buck One with 10,000 boarding passengers a year instead of flights with 1,000,000 boarding passengers?

    For example, Southwest flies only to 68 airports and all of these airports are in the Top 200 Airports in regards to passenger traffic. There are 19,820 airports in the USA with 599 airports certificated to serve commercial air carrier aircraft with nine or more seats and 381 airports are primary airports (Airports in the United States which provide scheduled passenger services and have over 10,000 passenger boardings per year are classified as primary airports by the FAA).

    If the legacy airlines want to compete with the discounter, they will need to eliminate flying their unprofitable flights or increase the fares on these unprofitable flights to reflect actual costs. These ‘unprofitable’ flights are flights to the mid and small communities. There will be a public outcry if the legacy airlines eliminate these flights.

    The second problem is the American public. Everybody wants to pay absolutely lowest price for their travel needs (airfare, hotel, car rental, etc.). I call it the Wal-Mart syndrome or the Big Box syndrome. They are unwilling to pay for services. I am willing to pay more for my fares if the level of services from the legacy airlines are top notch and etc.

    As long as there is an unlevel playing field, American public is unwilling to pay for the services and the legacy airlines continue to fail to sell their unique value propositions, we will see more of these fees.

  • Jacquelyn

    I never really understand these. Even when Southwest started this I thought, and what if even 3/4 of the passengers took up this offer, wouldn’t it defeat the purpose? If everyone gets priority then aren’t we back to where we started minus some cash? I guess you are gambling that not many will pay the fee.

  • Steve

    I think calling this “paying a fee to avoid paying a fee” is a little bit of an exaggeration. I think it’s more akin to what Carver called it: a form of trip insurance. You’re paying a bit extra in exchange for more flexibility – the ability to standby for an earlier flight, as well as a lower change fee should you change your plans entirely. I don’t see it as a bad thing. (I also don’t see the purpose of being in the first boarding group on a flight with assigned seats, and I’d never pay a penny in order to do that, but to each his own).

    Jacquelyn: the big difference is that since SW doesn’t assign seats in advance, being among the first to board provides a tangible benefit to many people – getting to select one’s preferred seat. I don’t know for sure, but I would hope that they would only sell early bird boarding to a certain number of people per flight. (My experience, the one time I bought it, was that few people opted to buy it. I got A16 on the outgoing flight and A18 coming home – and I think they reserve A1-15 for Business Select passengers, so basically I was at the very front of the line. But my wife, who simply checked in exactly 24 hours before the flight, was around A30. I would only buy it again if I was unable to check in online 24 hours before the flight – moving up from A30-40 to A15 is virtually meaningless, but moving up from a C to an A is huge).

  • Jacquelyn

    @ Steve,

    I know that SW has a cattle call boarding system, but you can also check in 24 hours in advance and get to board in the “A” section still, I have never not been in the “A” section, and all I care about is an isle seat. (I don’t want to have to climb over people if I have to use the “facilities”, and I don’t want to have to wait for someone to move if I have a connection to make). I’m smaller build though, so I don’t worry so much about the pitch, and I never recline my chair, because it is terrible for the person behind me. I guess maybe we have a different value system for preference. I also have learned from my time traveling as an unaccompanied minor way back when, was the closer you are to the flight attendants, the more likely they are to pass you extra snacks, no stand up wait for “facilities”, and they will often get you some water if you’re nice. (I have kids, so I generally head to the back of the plane) SW is my fav by far! If I have a connection, it is a whole other story!

  • Joe Farrell

    Soooooo – what happens if EVERYONE signs up for priority boarding on a flight? I’m lifetime platinum on AA but imagine if everyone was in the first boarding group. This could turn into a Monty Python sketch, silly silly silly, stop that now . ..

  • Arizona Road Warrior

    @ Steve – “I think calling this “paying a fee to avoid paying a fee” is a little bit of an exaggeration. I think it’s more akin to what Carver called it: a form of trip insurance.’
    - – - – - – - – - – -
    I call it paying for services that you didn’t want to pay for in the base airfare.

  • Arizona Road Warrior

    @ Joe Farrell – “Soooooo – what happens if EVERYONE signs up for priority boarding on a flight? I’m lifetime platinum on AA but imagine if everyone was in the first boarding group.”
    - – - – - – - – - – - – - – - –
    There are two points.

    The first point is that it devalues the benefits of being an elite AA member. If I was an elite AA member, I will ask AA what new benefit are they going to give to the elite AA members since one existing benefit was devalued.

    The second point is operations. What if 75% of the flight was in the first boarding group?

    Airfares are cheaper today than 10, 15 or 20 years ago; however, the costs of running an airline has went up. The bottom line is AA generating additional reveunes without regards or concerns to their elite members, operations, etc.

  • Arizona Road Warrior

    @ Steve – “(I also don’t see the purpose of being in the first boarding group on a flight with assigned seats, and I’d never pay a penny in order to do that, but to each his own).”
    - – - – - – - – - — –
    It is getting on the plane sooner so that you can put your carry-on luggage in the overhead bin.

  • MeanMeosh

    @Arizona – “The first point is that it devalues the benefits of being an elite AA member. If I was an elite AA member, I will ask AA what new benefit are they going to give to the elite AA members since one existing benefit was devalued.”

    There’s only one problem – “Group 1″ boards AFTER exec platinum, platinum, and gold (the generic “Priority AAccess” designation. So, if you’re an elite, your benefits aren’t getting diluted. You still get on the plane first.

    To me, this whole thing seems just a tad odd. Yes, you get a $75 off coupon from the change fee, but it doesn’t say anything about waiving the fare difference that you’d normally also have to pay when you change a flight. So basically, in the JFK-LAX example, you’re paying $38 roundtrip to jump the line at boarding time, the right to stand by free of charge, and to have your change fee plus fare difference reduced by $75. Maybe I’m missing something, but that doesn’t seem like a great value proposition to me. Now, if the fare difference also goes away, I think this is a MUCH better deal.

  • Chris in NC

    Everyone,

    To be honest, I WOULD pay the fee on American for the opportunity to board earlier. Besides the benefit of having access to choice overhead bin space, I like to RELAX in my seat while watching the chaos that follows as the last remaining passengers are trying to squeeze their oversized carry-on baggage into the dwindling overhead space.

    My wife and I have not flown a so called “legacy” carrier in the last 2 years, choosing to exclusively fly on Southwest. When Southwest introduced the Early Bird check-in option, we immediately jumped on it. While it is true that you can still get a “A” boarding pass if you check-in exactly 24 hours prior to the flight, I like the convenience of not having to put my day on hold 24 hours before the flight to “check-in”

    @ Joe Farrell,
    I’m sure that if the vast majority of travellers choose to pay the fee, and it becomes cluttered, then *GASP* the solution is to raise the fee. Thats the beauty of “free” market and “supply and demand.” Seriously, maybe I’m just a weird traveller, but I am perfectly willing to pay “extra” for some perks. The problem is that when you book a plane ticket, you essentially have 2 choices: a flexible, fully refundable, fully changeable ticket or a restricted ticket that treats you worse than cargo (non-refundable, non-changeable, customer no service, etc.). If the price difference between the two tickets were REASONABLE, I’d would book more flexible tickets. In reality, you have 2 choices: a $99 one-way fare (restricted) vs a $691 flexible fare. Can’t there be something in between?

  • Arizona Road Warrior

    @ MeanMeosh – “There’s only one problem – “Group 1″ boards AFTER exec platinum, platinum, and gold (the generic “Priority AAccess” designation. So, if you’re an elite, your benefits aren’t getting diluted. You still get on the plane first.”
    - – - – - – - – - – -
    Good to hear and thank you for this information. At US Airways, Group 1 boaridng is the US Dividend Miles Chairman, Platinum, Gold, etc.

  • Steve

    Arizona Road Warrior – true, boarding earlier means first access to the overhead bins. Whether or not that matters depends on your flight and personal preferences. For me, more than half my flights are on regional jets where I have to gate-check my carry-on anyway, so it’s not a big deal. It could be a big plus for someone else, though.

    MeanMeosh – the scenario you’ve outlined (paying $38 to be able to standby for free and reduce your change fee, should you make a change) isn’t going to make sense for some people, but it might for others. If I was a frequent business traveler who often needed to change my plans, it could be well worth it. Personally, I wouldn’t pay it.

  • Simon

    It never ends! I decided to take my family on the TRAIN this summer – I have over a 1,000,000 miles on American – SCREW THEM!

  • Aaron

    American’s chAAnge fee is $150, so a $75 discount doesn’t exactly make that cheap. With your priority fee, it sounds like you’ll still be paying $80-$95 to change your flight. As for early boarding… that helps, only because AA packs their planes so full that overhead baggage space runs out.

  • Mary Graham

    What a bunch of hokey double talk! Sigh, WHEN are they going to realize they’re not dealing with a bunch of idiots?? Honestly, I used to fly all the time, now I drive whenever and wherever I can, I’m fed up!

  • Anonymous

    While all passengers continue to whine about new fees, the airlines have unsuccessfully tried to raise fares several times to match increased costs (i.e. fuel). Because the airlines have been unsuccessful in raising fares (because the passenger is unwilling to pay the higher fare), they have had to become creative in ways to try and raise revenue.

    While these fees are starting to seem ridiculous, airlines continue to lose money quarter after quarter. I empathize with passengers, but the fact is that passengers and their unwillingness to pay higher fares for seats are part of the reason airlines have had to create all these new fees. Unfortunately, you’ve done this to yourselves.

  • Phil

    So if 50 or 80% of the passengers on the flight pay for priority boarding, who gets to go first? What a rip off, but unfortuantely the travelling public will buy into AA’s little scheme.

  • AP

    Not sure if this really qualifies as a fee, let alone a fee to get out of paying another fee. One doesn’t need to get on the plane early. If you choose to do so, there is a price. This is very different than a bag fee. People generally need to bring bags with them on a trip. I think the author is overstating things a bit but I’m sure this will help with the Google ads.

  • Kit

    I avoid AA at all costs – have only ever had headaches with them. As far as the early boarding fee, how about giving priority boarding to the customers who are paying a fee to check their luggage? At least that way the people already contributing to the bottom line due to the “unbundling” of fees can at least avoid the obstacle course of gate-checked luggage and the gauntlet of bags falling from the overhead. Paying for service is fine, but the nickel-and-diming is getting old. Just yesterday on Delta (LAS-ATL) they offer beverage service with snacks for sale, then an hour later offer additional beverages with complimentary nuts/pretzels/cookies. Nothing like making the customer feel appreciated! It’s also annoying to have the flight attendants preaching about storing bags in the overhead when you know well and good that the cargo hold is running far below capacity. If I figure out how to travel without shaving cream, deodorant and toothpaste maybe I’ll join the carry-on crowd, otherwise I’ll pay my luggage fees and demand the service I’m paying for.

  • David Z

    Can’t there be something in between?

    Sure there is, Chris in NC. Only different people have different definitions of “reasonable”, and different airlines are trying to match them.

    Anonymous’ comment is maybe something else to consider, however BS that is to some folks. Take note, though, that that’s only part of the reason why all this is happening.

  • MeanMeosh

    @ Steve – “the scenario you’ve outlined (paying $38 to be able to standby for free and reduce your change fee, should you make a change) isn’t going to make sense for some people, but it might for others. If I was a frequent business traveler who often needed to change my plans, it could be well worth it. Personally, I wouldn’t pay it.”

    I see your point, but I’m still not sure how applicable this would be even for a business traveler. Mainly because, if you’re a frequent business traveler, you’re probably an elite anyway, and get all of the benefits (except for the $75 change fee coupon) for free. Not to mention, unless you’re self-employed, your employer is footing the bill, so you probably don’t care about the change fee. It just seems like a rather steep charge for “change fee insurance”, which is basically what this ends up being. But, to each his own, I guess.

  • http://www.forestdirect.com cheap flights to south america

    All these fees and regulations are getting ridiculous :/

  • http://profile.yahoo.com/7PNXHSWNHBH5SSJTMM4YKOYLNE JhelaPeh Atatalyc

    You might be thinking that shipping your luggage instead of putting it on the plane will cost a lot more than paying the fees to the airlines. In many cases you’re probably correct but not always. A small box holding enough clothes for a week long trip could cost as little as $8 even if it gets shipped across a country. Take enough clothes with you for the first couple of days and ship the rest to your hotel. They will hold it at the front desk, so you don’t have to worry about the delivery window. Once you do the math, it isn’t as laughable as you would think especially if you have to take a lot of luggage with you.