Good airline fees? Some are worth the money

By | February 14th, 2010

It’s no secret the airline industry wants you to pay extra for everything.

And I really mean everything.

A fee to pay? Allegiant Air and Spirit Airlines already charge a “convenience” fee to use your credit card.

A water fee? It’s hard to find a discount carrier that doesn’t make you pay for soft drinks, including bottled water.

A fee to pee? Yeah, Ryanair’s working on pay toilets, if reports are to be believed.

But this isn’t another story about airlines and their misguided fees. It’s about the surcharges that are worth paying — and why you should consider saying “yes” to them. That’s right, I said “worth it.” While many fees are outrageous, some aren’t entirely out of line.

If nothing else, fees are unbelievably profitable. The domestic airlines collected roughly $1 billion in ticket change fees and more than $1.2 billion in baggage fees during the first half of 2009, according to the government. American Airlines took in the most baggage fees — it raked in $226 million — while Delta Air Lines won in the change-fee category, collecting a cool $392 million.

Most passengers I know don’t mind paying fees, as long as they do all of the following:

They’re optional. And it must be a real choice. Everyone uses a credit card, so a “convenience” fee to pay with plastic isn’t a true choice. Neither is a fee for the first bag, because at a time when the TSA has banned toothpaste and hair gel in reasonable sizes from all carry-ons, almost everyone checks a bag.

They don’t charge for something that used to be free. The best fees add something instead of taking away. For example, after 9/11 many airlines upgraded their in-flight menus and then began charging for food. Almost no one complained, because airlines had already done away with in-flight meals on most domestic flights. Taking a bag of pretzels that used to be free and charging for it would have been the wrong move.

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They add value. JetBlue does this well. Whether it’s pillows or movies, the airline seems to know that adding to the product is the best way to do fees — not by removing amenities and services. I have a full interview with the airline in which its fee philosophy is explained. Giving passengers more for their money has made the airline profitable.

They’re reasonable. Charging a $150 change fee on a $49 ticket is completely unreasonable. A change fee should be a percentage of the ticket. Or better yet, there shouldn’t be one at all. I mean, how much does it really cost to change the date on a ticket?

So why have so many bad fees prevailed? Probably because we’ve let them, says airline analyst Michael Miller. “For example, the bag fees were done because fares were depressed and airlines were looking for other revenue sources to stay afloat,” he says. “They had no idea passengers would pay so much, so it’s permanent.”

Or so it seems.