Who has the worst fees in the travel industry? Here’s the surprise answer

Will the industry with the worst fees please stand up and take a bow?

You’re looking at the airlines, over in the corner, aren’t you? Granted, they come off as a little shady and they’re constantly making news for some insane new surcharge, like paying extra for confirmed seat assignments or to carry a bag on the plane.

I polled readers of this column – I’ll get to the answers in a moment – but let me offer a clue: It’s not the airlines. They’re bad, but they’re apparently not the worst. They’re not even number two.
Continue reading…

Ridiculous or not? When a “fuel surcharge” costs more than an airline ticket

When Walter Nissen signed up for a British Airways Chase Visa card recently, he thought he’d be jetting off to London after earning just 50,000 miles.

He overlooked one little detail: A glance at the fine print revealed he’d have to pay an extra $400 in fuel surcharges.

“We’re not talking a few dollars for mandatory government taxes and fees,” says Nissen, a computer scientist from Livermore, Calif. “Their secret surcharge goes right into British Airways’ pocket. That’s dishonest in my book.”

Continue reading…

When should an airline tell you about fees? Survey says …

The sooner, the better.

A survey of 651 readers found an overwhelming majority (80.2 percent) believe airlines or travel agents should quote an “all-in” price that includes any optional fees that traditionally were part of the ticket, such as a fee for the first checked bag or the ability to reserve a seat, when they ask for a fare quote.

A smaller number (17.4 percent) were content to wait until they were done shopping, but before they booked their tickets. Only 2.3 percent say it’s OK to show the total price when they’re ready to buy the ticket. And 0.2 percent — a single respondent — thought the fees should never be revealed.
Continue reading…

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.
Continue reading…

Ray LaHood: “We’re in the era of full disclosure”

In part two of their interview with Transportation Secretary Ray LaHood, Christopher Elliott and Charlie Leocha explore the new tarmac-delay restrictions for airlines and pending rules for the disclosure of surcharges, such as baggage fees, that have spread through the airline industry. Here’s the first part.

The number of enforcement actions are up at the department’s Aviation Enforcement Office. Did you go down there and light a fire under them?

I think that people in the department understood when I came on board that safety was number one and we were going to look out for consumers. People knew I was a member of Congress and that I was co-sponsor of the Passenger Bill of Rights. Once we put out the tarmac rule, that sent a message out all over these two buildings and all over the FAA buildings who we care about.
Continue reading…

Deloitte’s Simonetto: “It’s easy to view this as the big, bad airline taking advantage of travelers”

Deloitte.Mike SimonettoMike Simonetto is the principal and global leader of Deloitte Consulting’s pricing and profitability practice. With airlines and other travel companies testing our willingness to pay fees, I wanted to ask a pricing expert like him why travel companies were doing this and where it’s all headed.

How did unbundling and a la carte pricing get started in travel?

It’s easy to view this as the big bad airline taking advantage of the travelers.

This is an extension of revenue management. I should define revenue management for you: Travel companies have high fixed asset costs. You’re trying to use those assets as much as possible. For example, a hotel room is a time-perishable product. If it doesn’t get rented this evening, it will never be able to get rented again. So any revenue is better than none. That’s revenue management, and that that originated with American Airlines 30 years ago.
Continue reading…