Category Archives: Ancillary Revenue

What Would a Government Mandated Fare Fee Table Look Like?

It’s no surprise that our federal leadership has taken interest in the broadening fees-based services that airlines are charging Customers. There’s bound to be some concern when over $2.7b in baggage fees was generated in 2009.  Almost 20 carriers are charging for the first and second bag these days, with JetBlue and Southwest Airlines being the notable exceptions.
Its not just the baggage fees that cloud the total purchase price for air travel.  Once you pile on cancellation fees, change fees, and transfer rules you may find that a passenger’s out of pocket price at booking can increase considerably once they’ve finally taken to the skies.
It’s still difficult for customers to accurately compare the cost of travel across carriers, even though the Department of Transportation provided guidance back in May 2008 requiring that “air carriers should place a notice regarding the above-described additional baggage charges on the first screen in which the carrier offers a fare quotation of a specific itinerary selected by a consumer.”
For,,, and Orbitz this guidance is translated into a hyperlink  paraphrased as “Additional baggage charges may apply”.  That little link can turn into a price difference of hundreds of dollars for a family traveling with checked luggage.  At no point is the Customers informed of the potential increase in purchase price on the itinerary qutoation screen.
The recent furor in the House over feess may require a more explicit description of the potential additional charges.  Imagine if the carriers are required to fully disclose the potential “all-in” price for the trip.  Let’s take a look at what that may turn out to look like….
Fee Advisory Example in Browser
The key components for this advisory would be the following:

  • Change Fees
  • Cancellation Feeds
  • Carry-on Baggage Fees
  • Checked Baggage Fees

A more advanced notice could include the following:

  • Lap Child Fees
  • Unaccompanied Minor Fees
  • Overweight Luggage Fees
  • Reservation Assistance Fees
  • Check-In Fees

With the recent concern over these fees, don’t be surprise if you see something like this appear in your favorite carrier’s booking flow.   Although carriers may be upset to display this data – believing that it will cause abandonment – it should only impose a minor impact to their booking rates as the fees are now stabilizing across the legacy carriers. Additionally, this should reduce the sticker shock and pain that occurs at the stations.
I’ll continue to monitor the situation from the house to keep you in the loop.
(1) US Department of Transportation.  Disclosure of charges for checked baggage.

Better watch your wallet when checking your bag – fees have increased over 1500% since 1990

It’s amazing how the airline industry has quickly converted the concept of free checked luggage into a new revenue stream through additional fees on coach fares that include baggage.  With over $2 billion in baggage fees in 2009 alone, and over 20 carriers reporting bag fee collection, it seems as though this revenue train has no plans on stopping.
More interesting is how quickly this new line of income has grown.  Below are a few stats of Baggage and Cancellation Fees from 1990 to 2009 based on data from the Bureau of Transportation Statistics.

  • In the last ten years…
    • Baggage Fees Increased 1566%
    • Cancellation Fees Increased 467%
  • From 1990 to 2009….
    • Baggage Fees comprised only $119,737,000 in 1990.  By 2009, that number had increased 2186% to $2,728,850,000
    • Cancellation Fees comprised only $50,764,000 in 1990.  By 2009, that number had increased a whopping 4575% to $2,373,019,000.

Baggage and Cancel Fees 1990-2009 Graph
Baggage and Cancel Fees 1990-2009 Graph