Flying Not So High

23 May 2008



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American Airlines Fights High Fuel Costs with Extra Fees

As the oil companies rake money in hand over fist, the airlines of the world are shoveling it at them. Air fares in the US have risen about 20% compared to last year, but it isn’t enough. So, American Airlines has announced a set of new fees to help offset the high price of Jet A fuel, which is up 80% since last year. For example, it’s going to cost $15 to check one bag. American already charges $25 for the second bag. And there’s more to come.

The fees aren’t the only way AA is trying to improve its top and bottom lines. It is cutting capacity by 10-12% and retiring older fuel guzzling aircraft. In addition, pink slips and unemployment payments loom for about 300 workers very shortly, and further layoffs could hit the thousands. These standard responses to higher costs, though, don’t annoy the public as much as the new fees.

And, the fees don’t apply to everyone. If a passenger has paid for business class or has paid the full coach fare, or has premium status in AA’s frequent flier program, the bag fee doesn’t apply. Apparently, it isn’t necessary to gouge these travelers, who got gouged when they bought their tickets. Also, those leaving the US don’t have to pay the baggage fees. When passengers who do have to pay the fees find out about these exemptions, AA will probably lose business and will certainly have some angry customers.

There are other fees as well. For parents with small children, who customarily ride sitting in Mom or Dad’s lap, AA will charge anywhere from $10 to 10% of the ticket price. Help with reservations will cost $5, and for premium seating in coach (4 extra inches of leg room near bulkheads and so on) could cost $25 extra.

AA has to do something to boost revenues, but this isn’t the way to go. All this will do is anger passengers, who already think the airlines in the US are some form of penitentiary operation. On Tuesday, the University of Michigan released a survey that illustrates this. On a scale of 1 (worst) to 100 (best), the top airline is Southwest at 79 (up 3 from last year), but second-place American is at 62, which is the average (a skewed figure given Southwest’s result). One gets what one pays for – the airlines should simply raise fares and stop nickel-and-diming customers; after all, they aren’t banks.

© Copyright 2008 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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