The airline industry is profitable again — really profitable — and here’s one reason why

In a word: fees. Lots and lots of fees.

Alright, it isn’t just the baggage surcharges and change fees. Airlines have cut capacity and raised fares, and business travelers are coming back after a long absence. But with United Airlines posting its first profit in three years and Delta recording its best quarter ever, you’ve gotta wonder — how much do fees and surcharges have to do with it?

We have an answer, thanks to Amadeus and IdeaWorks. Disclosed ancillary revenue activity from the world’s airlines jumped 43 percent to $13.5 billion in 2009, compared to a year before, they reported.

The ranking reveals United, America, Delta, Qantas, and Ryanair as top overall ancillary revenue producers for 2009.
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The low airfare that vanishes in a click

Now you see it. Now you don’t.

When you’re airfare shopping, attractive prices can vanish in a split second. Just ask Jim Doll, a systems engineer in Atlanta, who recently tried to buy a ticket to San Francisco on AirTran Airways’ Web site. He found a one-way fare for just $130, but by the time he’d toggled over to to see if he could do better there and then clicked back, the price had changed.
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Airfare increases? What airfare increases?

Time for a little reality check. Everyone is screaming about the unprecedented rise in airfares. Well, everyone is wrong.

Our good friends at the Bureau of Transportation Statistics released their first quarter airfares this morning. Granted, we’re already in the third quarter of 2008, and granted the numbers showed a healthy four percent increase from a year ago.

But look past the first chart. Go on, scroll down. See the one on airfares adjusted for inflation (Table 6)? The BTS numbers getting all the attention don’t account for inflation. But look at this …

Airfares have remained relatively steady during the last decade. But when you account for inflation, they’ve actually gone down.

Bottom line: air travel is still a bargain. Don’t let anyone tell you otherwise.

(Disclaimer: I took a few liberties with arranging the data on the above chart — please refer to the original for the raw numbers.)

USA Today story triggers battle of the airfare gurus

Can’t we all just get along?

Earlier this week, USA Today declared that some summer airfares had doubled, tripled — even quadrupled — with a sensationalistic headline that was worthy of this blog.

The nation’s newspaper called on “travel price guru” Tom Parsons of, who said the cheapest tickets available on many routes in July are “100 percent to 300 percent higher” than a year ago.

Then the competition pounced.

“I was so confused by the statements,” wrote the other travel price guru, Rick Seaney, on his blog. Then he proceeded to dismantle Parson’s numbers.

Article states, non-stop Detroit-Providence roundtrip travel in July is $595 — up 365% — not true — Northwest Airlines has the only non-stops (no competition) and Wed, Thu, Fri, Sat, non-stop roundtrip 4-night trips in July are priced at $309 – $351 out-the-door (including the $21 in fees not mentioned on the noted fare). Departures Sun, Mon, Tue (non-stop 4 nights in July) are from $309-485 out-the-door.

Then the other travel price guru, Terry Trippler, joined in. This afternoon, he released a video that questioned Parson’s numbers. “The fares and facts just weren’t right,” he says, referring to Parsons only as “the source.”

“Just trying to keep them honest,” he adds.

What’s got their feathers all ruffled?

It could have something to do with the fact that USA Today remains the most credible source of airline news in the mainstream media. Being featured as the “travel price guru” means you’re the alpha wolf of air travel.

But I think it’s also true that there’s room for all three airfare experts, and probably a few more.

As an observer of the airline industry — but by no means an expert — I can’t believe USA Today (or any newspaper) would bother quoting airfares in an article when everyone knows prices change by the minute.

What they really need is a ticker to display the fare fluctuations in real time. And you can only do that online.