No New Fees In US Spending Bill

AFP is reporting that the Federal Government budget compromise has dropped the proposed increase in airline ticket fees.

Photo Credit: US Airways

This is a major win for travelers.

"Congressional negotiators earned the ire of US airlines last month when they unveiled a deal that would end billions of dollars in crippling automatic spending cuts, but chose to raise air travel fees to help pay for it. 

That deal would have jacked up the "9/11 Aviation Security Fee" from $2.50 per flight segment to $5.60, and doubled the fee for a return trip to $10.00, generating some $13 billion over the next decade."

The final bill funds the government until the September 31, 2014. Therefore, Congress may try to insert an increase in airline ticket fees in next year's bill.

At least we get a small reprieve.

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Airline Fees Add $27 Billion to the Airline Bottom Line

The latest number for profit earned from ancillary fees, those pesky a la carte fees like extra bags, early boarding, premium security access and many more, are out for 2012 and it shows that the airlines are making it big on these fees. The numbers show that airlines added $27 billion in profit from extra fees during 2012. Many of the low cost carriers led the way with the highest percentage of revenue from these fees. Airlines like Spirit earn a good chunk of their revenue outside of just the ticket price and in 2012 they earned an average of $48.72 per passenger and 38.5 percent of their total revenue just on the extra fees.

To me this just means that ancillary fees are here to stay. The profit that can be earned that involves little extra work on the airlines part, such as earning money for a bag they would most likely be carrying anyways or adding a few extra people to the early boarding groups is straight money into their pockets. Though some consumers may stop paying for these conveniences, there are always consumers that are willing to pay the little extras for the service. As we move forward over the next few years I expect we will see the return of many programs like United's subscription programs for baggage or extra room seating options. Infrequent flyers who are willing to pay for the extra perks, but may not realize the benefits they could receive from flying up to elite qualification levels, will be the target here and many of them will buy in. So...don't expect that extra bag charge or less people in the premium security lines soon. As long as someone is willing to pay...the airlines will gladly take their money.


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UPDATED: Southwest Adds $40 Fee For Early Boarding

Every day it seems like Southwest airlines is moving more and more in the pay for services model. Today the announcement was made that the discount airline would be implementing a new option for their passengers on the day of departure, early boarding.

The service, which would be $40.00, would allow individuals to board the flight early and bypass the zone system of boarding that Southwest is famous for. The interesting thing is the option will only be available at the gate on the day of departure and agents will only start selling the option at 45 minutes before the flight.

It will be interesting to see if this is going to be the new trend for Southwest.


UPDATE: A good friend correctly pointed out that I didn't have all of the info here and helped me clarify.

It appears that the early boarding option will be in to the "A" Boarding Group slots that are traditionally for "Business Class" customers. The option to board early will only be available IF there are spots left (i.e. If the Business option isn't sold out).


Here is the full announcement from Southwest:

Southwest Airlines Offers New Boarding Option

Southwest Airlines Customers LUV the coveted "A" boarding group, and now they have one more way to be among the first to board.  Beginning today, Southwest Airlines will offer Customers the opportunity to purchase one of the earliest boarding positions at the gate for $40 per flight, when available.

"At Southwest, we have developed boarding options that fit a variety of our Customers' needs—from EarlyBird Check-In to our Business Select Fare," said Kevin Krone, Southwest Airlines Vice President of Marketing, Sales, and Distribution. "Offering Customers the option to improve their boarding position on day of travel is one more way we can offer the travel experience that best fits their needs."

This new boarding option will only be offered at the gate on the day of travel, beginning 45 minutes before the flight departs.  Customers will hear an announcement in the gate area and will be able to purchase an available boarding position via credit card from a Customer Service Agent. Customers will only have the opportunity to purchase these positions if available. The airline successfully tested this new boarding option in San Diego last month, and received positive feedback.