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Why So Many Airline Fees? Here’s an Honest Perspective
Recently, ultra-low cost carrier, Spirit Airlines imposed a new bag fee. It will now cost $100 for a checked bag, no exceptions. Many passengers are outraged at the new fee but should they be? Let’s take a slightly, broader look at the airline industry. We obviously live in a world of much more frugal spenders when it comes to air travel. Websites like Orbitz and Price line continue to find the lowest fares and when all is said and done the real loser here is the airline. Regardless if the flight sells out; it’s highly unlikely the airline will have turned a real profit. We seem to explore this topic a lot; however it’s one that never seems to get addressed properly.
I don’t want to play devil’s advocate and you can call this a semi-rant, but I feel it may be in order to better explain the mess that is the airline industry in America. For starters, loyalty is a thing of the past. Passengers don’t care about brand loyalty so why should the airlines? They know what you really want…a cheap ticket. Consumers who purchase the cheapest airfares far exceed those who feel loyal to a particular airline. Loyalty only really exists in places like Minot, North Dakota where flight options are extremely limited. That’s not really loyalty, is it? Regardless, I am guilty of cheap fare hunting. At least I was until I found an airline that caters to everything I like in a flight. I no longer feel the urge to shop around unless I absolutely need to. For example, I live in Las Vegas. If I need to be in southern California for any reason and refuse to make that four hour drive through the Mojave Desert, I won’t fly on my favorite airline. I will take Southwest. Not because the ticket is cheaper but because they offer a variety of non-stop flights to where I need to go in southern California.
For the past 25 years the legacy airlines such as American, United and U.S Airways have been losing billions of dollars. The odds are they aren’t being greedy by charging fares that are more expensive than the average low-cost carrier, they are trying to run a business, that one day, may pull out a profit. In a previous blog, I wrote about the operating cost of an airliner. It’s not cheap and never will be, regardless of how new and fuel efficient the airplane might be. There is an amount the airline has to continuously pay to keep that jet trucking around the tarmac during peak hours and flying against the occasional 100 mile and hour head winds in addition to an over stressed, antiquated air traffic control system. All of these require a steady stream of gas money.
Another reality of the industry is the fact passengers seem to be under the impression the airlines are nickel and diming them. Facts could point out that it is the other way around. The result has been a decrease in service, on board amenities and the unfortunate reduction of employee pensions, salaries and benefits. This ultimately creates a great deal of inner company hostility and the final result is unhappy workers and labor disputes. The current issues with the American Airlines pilot union can be used as a great example.
With all that said, let’s think about these fees the airlines are piling on. The ones everyone complains about. Right now, those fees are the only way an airline will ever make money as long as consumers continue demanding cheap airfare. Without them, they will go out of business or be forced to merge with another carrier. “So what” you say? Well, if that happens, the consumer’s choices diminish and fares will skyrocket and likely never return to that $250 round trip ticket from L.A to New York. You will be forced to pay a lot more.
For those who might remember the late 70s and 80s when an airline ticket was triple the cost of what most folks pay now. Employees were happier with their wages and quality of life, passengers got incredible service and most flights were on time. The reason was simple. Consumers paid a portion of the actual operating cost of a flight and the airlines were making consistent profits. Unfortunately, those days are long since passed and have been replaced by the low cost demand and the battle to remain competitive. The result is the airlines desperate struggle to come up with ways to make money so they can keep selling those profitless cheap fares.
Of course we don’t recommend spending a fortune on air fare and we understand times are tough for many Americans, however, you can do your part by partially understanding that the business of the airline industry is just that…a business. Like most businesses they need to make a consistent profit to succeed. The overhead cost to run an airline is through the roof…no pun intended.
What Spirit airlines has created is a great and effective business strategy, regardless of how unconventional or unfair it might seem. We can look at their business model in a sense of how we might look at how our favorite restaurant does business. Everything in addition to that main course you ordered will cost you extra. Did we really think that $60 one way fare from Las Vegas to Fort Lauderdale would come without a catch? Remember, flying is a privilege and we should all, at least feel grateful that we have so many options to choose from. It is also still the safest way to travel and on many occasions, a lot cheaper than driving. That should be worth something.