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Airline Fees Here To Stay, Even Fuel Costs Sink

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You had better get used to all those new airline fees. The Atlanta Journal-Constitution writes “although airlines are enjoying lower fuel costs, it doesn’t mean the end of extra fees for travelers. That’s because the airline industry has made fees for everything from seat assignments to checked bags part of a new strategy which appears to be here to stay. Tacking on fees makes it easier to charge passengers more, even if competition makes it difficult to raise fares.”

When airlines began adding such fees earlier this year, most cited high fuel costs for the changes. However, airline consultant Bob Mann tells the Journal-Constitution: “I think that was a convenient excuse.” Regardless of why, the new “a la carte” pricing system appears to be becoming increasingly entrenched. “I think quite frankly the environment that we’re in we’re really unlikely to roll any of those back,” AirTran CEO Bob Fornaro is quoted as saying by the Journal-Constitution about his airline’s fees. AirTran officials say the carrier could make as much as $130 million a year combined from its first-checked-bag fee and from selling advance seat assignments.

AirTran CFO Arne Haak discussed the move toward a la carte pricing -– and customers’ purchasing behavior -– last month while speaking at a conference. “For many years, airlines have stuck with one price gets you everything whether you need it or not,” Haak is quoted as saying by the Journal-Constitution. “Really what is happening is an unbundling of the services… . That’s how customers respond. Our customers will spend three hours on the Internet figuring out how to save $8 when they buy an airplane ticket. Then they’re going to come to the airport and spend $20 to buy a soda, a bag of chips, a candy bar and a magazine that they could have bought for half the price.”

Still, not all airline attempts to add fees have worked. United, for example, backtracked from a plan to sell meals on some of its trans-Atlantic flights out of its Washington Dulles hub. Others, including Delta, have scrapped fees that they had been charging fliers to use the curbside “skycap” check-in option. But, for now, at least, many of the new fees appear to be permanent.

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