11 New Airline Fees We Might See in 2011
Jan. 5, 2011— -- Airline fees are not going away anytime soon and -- if past years are any indicator -- 2011 is likely to bring a whole new bevy of fees to the flying public.
Why? Fees are big business for the airlines and one of the main reasons they have been profitable in 2010. The 26 major airlines tracked by the federal government took in $3.84 billion in profits from July to September, according to the Bureau of Transportation Statistics. More than $2.1 billion of that profit came from fees. (Baggage fees and reservation change fees were the two largest chunks at $906 million and $646 million respectively.)
The airlines took in countless other non-airfare revenues, from charging for seating assignments and on-board sales of food, drinks, pillows, blankets and entertainment. Remember the $1 you paid for headphones or that $5 to watch HBO? Well, all of those fees are in addition to the $2.1 billion noted above.
"The airlines are only profitable because of the fees," said George Hobica, president of airfarewatchdog.com. "When airlines try to raise fares to a level that reflects the actual cost of doing business, passengers tend to stay home or drive. It's a very price-sensitive business."
Wall Street analysts and industry watchers all say the fee frenzy is likely to continue. That is especially true as the price of oil starts to creep up again.
"How do they pay for the extra money needed for oil? Fees," Hobica said.
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In case you were wondering, Spirit Airlines reported the largest percent of operating revenue from fees and other non-airfare revenue -- a whopping 26.9 percent. Spirit -- which started charging for overhead bin carry-on bags in 2010 -- has become America's answer to European discounter Ryanair, which is known as a leader in fess.
So with all that in mind, we asked Hobica what fees he is predicting for the new year. Some of them will shock you.
No. 1: In-Person Check-In Fee -- Airlines want passengers these day to use those airport kiosks or online check-in for everything. And there's a good reason for it: they save money by having to hire fewer people to work the counters.
"Who cannot use a kiosk?" Hobica asked.
Ryanair already charges a 40 euro fee -- the airline calls it a "penalty" -- for those passengers who need to have their boarding pass reissued at the airport. In other words, do it yourself or pay the fee.
Spirit CEO Ben Baldanza told ABC News in August that he was considering a new fee to talk with a human at the airport.
