Sunday, March 27, 2011

Airlines Get More Creative with Fees

Boston.com: Beleaguered airlines are trying to generate revenue wherever they can.

Last year, airlines around the world collected about $18 billion from fees for things such as checked baggage and early boarding, according to an estimate by airline consulting firm IdeaWorks. In five years, airlines expect that 15 percent of their revenue will come from fees for optional services — double the amount it is now — according to Forrester Research Inc., based in Cambridge.

“Airlines aren’t just transportation companies anymore, they want to be retail merchandisers, like Wal-Mart, offering a $1 12-pack of Coke at the back of the store — hoping you’ll buy some Tupperware along the way,’’ said Rick Seaney, president of FareCompare.com. “So expect to see more airline fees and discounts on these fees, like half off Wi-Fi on Thursdays when the moon is full.’’

Airlines are charging for many things that once were free, including checked baggage, pillows, and snacks. At US Airways a window or aisle seat toward the front of coach comes with a price tag — $12 on a flight from Boston to Philadelphia, for instance. On American Airlines, a seat in the front of coach will cost $19 to $39 more, but its occupant also gets to board early (available on its own for a $10 fee).

Even JetBlue Airlines — which prides itself on giving passengers free perks such as the first checked bag, a TV in every seat, and all-you-can-eat plantain chips — recently bumped up its fee for a second checked bag from $30 to $35 in response to the cost of fuel.

Spirit Airlines, which charges passengers $20 to $45 to put their carry-ons in an overhead bin, leads the way when it comes to fees, getting 27 percent of its operating revenue from optional products and services, according to the Bureau of Transportation Statistics.

(Airlines) also are finding new things that passengers can pay for. American will send someone to meet passengers at the curb, help them with baggage, and escort them to the gate for $125 each. Surfing the Web on a three-plus hour flight on AirTran Airways costs $12.95. United Airlines just launched a champagne brunch — in coach — with quiche, fresh fruit, cheese, and salmon for $24.99 on some flights.

Other new amenities include Continental Airlines’ fare lock-in, which allows travelers to hold a fare without buying it for three days for $5. As of this summer, Delta will offer economy seats on international flights that recline 50 percent farther, and have 4 more inches of legroom, for an extra $80 to $160 each way.

GuestLogix is rolling out a mobile application that will allow passengers to browse for items on their smartphones in flight and has developed a feature that will enable passengers watching a movie to touch the screen and order a scarf an actor is wearing. Proud estimates that onboard retail shopping partnerships could bring in an extra $1 to $5 per passenger for airlines.

Other possibilities analysts see: offering preordered premium meals, providing in-flight spa services (which Virgin Atlantic has done in the past), renting entertainment devices, and issuing money-back guarantees for on-time flights. In Spain, passengers on the low-cost carrier Vueling Airlines pay extra to keep the middle seat empty. And how about charging people to use the restroom, like Irish carrier Ryanair has proposed?

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