"Airlines adding fees: Carriers risk backlash to create revenue"

Wednesday, September 17, 2003

Airlines adding fees
Carriers risk backlash to create revenue
By Clint Swett
The Sacramento (CA) Bee


When John May checked in for an America West flight in St. Louis recently,
he had to shell out $50 because one of his bags weighed more than 50 pounds.
He wasn't amused.

"It's a hidden charge," said the Memphis, Tenn., resident before boarding a
flight last week at Sacramento, Calif., International Airport. "They should
let people know before they get to the airport."

Indeed, during the past six months most of the nation's major airlines have
quietly begun levying excess-baggage fees of $25 or more on every bag that
weighs more than 50 pounds. Previously, the weight limit was 70 pounds.

That new policy and a passel of other charges will provide some extra
revenue to cash-strapped carriers. But they also might alienate customers
already chafing under the post-Sept. 11, 2001, hassles of air travel.

Some airlines say the new baggage rules simply reflect the higher costs --
both in labor and fuel consumption -- of dealing with heavy luggage.

Others, such as Alaska Airlines, which will put the new baggage rules into
effect in October, say lighter luggage means fewer workplace injuries.

But whatever the reason, the baggage fees and other charges aren't likely to
improve the mood of grumpy travelers.

"They are nickel-and-diming passengers, and I've seen people get a little
upset," said Richard Gritta, a business professor at the University of
Portland who studies the airline industry. "It could create a real backlash
problem."

In addition to the new charge for bags that weigh between 51 pounds and 70
pounds, airlines have begun nicking customers in other ways.

American Airlines, for instance, recently began charging $50 for paper
tickets to nudge fliers to accept the less-expensive electronic versions.
While American's charge appears to be the highest in the industry, nearly
every other airline levies some sort of paper ticket premium.

Within the last year, many carriers also began charging customers $100 to
change a reservation -- as long as the change was made by the day of flight.
Make a change any later than that and nonrefundable tickets become
worthless.

Even the fees airlines charge to carry an unaccompanied child have risen to
between $40 and $75 each way.

Not all airlines are imposing higher luggage fees. Southwest Airlines allows
passengers three checked bags, rather than the two allowed by other
carriers. And that luggage can weigh up to 70 pounds a bag with no
additional fees.

Southwest also doesn't impose a change fee for switching flights, nor does
it charge extra for paper tickets.

While Southwest is one of the few airlines that continue to be profitable,
industry experts say that most carriers, desperate for additional revenue,
are looking at all kinds of means to bring in extra money.

Plagued by a slump in business travel, competition from low-cost carriers
and the fallout from the Sept. 11 terrorist attacks, the nation's airlines
are expected to lose $7.7 billion in 2003. That follows an estimated loss of
$19 billion in 2002, according to the Air Transport Association, an industry
trade group.

To Kevin Mitchell of the Business Travel Coalition, a Radnor, Pa.-based
business advocacy group, the baggage fee "is just one more example of scores
of initiatives to squeeze every penny from passengers during this disastrous
time for airlines. On the one hand, you cannot blame the airlines when
survival is on the line," Mitchell wrote in an e-mail. "On the other hand,
some of these types of initiatives have contributed to the airlines' current
woes."

Travelers might understand the reasoning behind policies such as charging
for paper tickets. Airlines can save at least $10 per passenger by issuing
electronic tickets, according to airline analysts at the Boyd Group in
Denver. Passengers, for their part, don't have to worry about losing their
paper ticket, or leaving it on the kitchen counter when they depart for the
airport.

But the imposition of other fees such as excess-baggage charges might just
anger passengers.

Attached Photo:

Lindsey Mummert, 18, left, and Laura Garber, 17, head to the United Airlines
curbside check-in, loaded down with carry-on luggage at Sacramento, Calif.,
International Airport. Some airlines are charging $25 or more for bags that
weigh more than 50 pounds.

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