Travel Maze: The Airline Extra-Fee Game
It shouldn't have been too surprising to travelers when Continental Airlines (CAL) announced in March that it was eliminating its free turkey sandwich and other complimentary food in coach -- except on longer coast-to-coast flights. After all, most major carriers stopped offering courtesy food following the passenger slump that started after the Sept.11 terrorist attacks.
Airlines began selling in-flight food and discovered they had a whole new way to make money. Over the last couple of years, airlines have expanded their for-charge food services.
They guarantee you a seat with your ticket, but anything else is a la carte. The official name for this practice is "unbundling." Carriers now charge coach passengers for everything -- from checking your luggage to using the elite security line reserved for first-class passengers. Some airlines even charge for a pillow and blanket.
Wrangling Extra Cash
So, the only surprise from Continental was that it was a little late to the game. Continental's announcement earlier this month that it was going to charge an extra fee for exit-row seating was a dead giveaway that free food would be the next to go. When reporters at the time asked if the courtesy food would continue, an airline spokeswoman danced around the question.
Even the airline that has promised "bags fly free" has gotten into the act. Southwest Airlines (LUV) may not charge for checked bags, but that doesn't mean that it hasn't figured out a way to wrangle some extra cash by charging you to board earlier than your fellow passengers.
As airlines push for profitability, their strategy is to keep adding to the fare. The problem for the business traveler is that they're left holding the bag.
No More Free Exit-Row Seats
If your work for a company that will pay for your ticket, it probably won't pay the extra $59 Continental charges to sell you a few extra inches of legroom in the exit row on a flight from Newark to Houston. Continental used to give away those seats, and not just to elite flyers who were in the top tier of their frequent flyer program. On countless occasions, I was able to reserve exit-row seats on Continental just by checking in online at the beginning of the check-in cycle, 24 hours before the flight.
Continental spokeswoman Julie King told me that exit-row seats were still available online for free, if they're not already snatched up by paying customers. But don't get your hopes up. "Demand for the extra legroom seats has surpassed our early expectations,'' she says.
The number of add-on options can certainly get confusing for business travelers. Southwest's new Early Bird priority boarding program, which guarantees that passengers will be given better boarding positions, is different from its Business Select program.
"A 'Nice to Have' Upgrade"
Business Select customers are the first to board a plane, and they may pay hundreds above Southwest's best discounted fares for that privilege. Since Early Bird customers pay only $10 more each way, they're seated only after Business Select and top Southwest frequent flyers have boarded. Southwest spokeswoman Olga Romero says the two programs are successes for the airline's bottom line. Business Select revenue was $72 million in 2009. "Early Bird began in September and contributed $15 million in 2009 in only three months," she says.
Romero says Southwest has no plans to add luggage fees and continues to differentiate itself from other airlines engaged in add-ons. As far as Business Select and the Early Bird check-in she says: "There's always room for a 'nice to have' upgrade in your travel experience."
United Airlines (UAUA) seems to have the most confusing add-on options because it has so many of them. You could buy Premier Line access for $19 and be fast-tracked through the security line normally reserved for United first-class or elite-access passengers. Or Economy Plus will give you five extra inches of legroom starting at $9. Or you can sign up for a whole year of Economy Plus access for $425. Or if you want Economy with Premier Fast-Track, which enables you to earn frequent-flyer miles, it will cost you $795 a year.
But maybe you just want Economy Plus and Premier Line, and early boarding with seating group one, access to Red Carpet Clubs at airports in the U.S. and bonus miles equal to 100% of your flight miles earned? Well, United will sell you a combined bundle of these options starting at $47 for shorter flights.
The options are so numerous that you could spend hours trying to figure them out. The problem with these programs, and those of other airlines, is that you may not even need the enhancements.
There's no point in paying to go through the first-class, elite-flyer security line if there's no crowd in the coach line. And a United traveler might feel pretty bad about shelling out $425 for a year's worth of extra legroom seat upgrades if those seats aren't available. In this new world of add-ons, there are no refunds, only a guaranteed revenue stream for the airline.
Continental says nixing the meals will save $35 million a year. What it hasn't said is how much new revenue it will obtain from selling meals. Continental spokesman Jim Compton said in early March that the paid food will actually be an improvement over the free food. "Our traditional free-food model has served us well for many years, but we need to change to reflect today's market and customer preferences," he said.
I can't wait to pay $8 for my formerly free turkey sandwich, which I expect will have its own fancy add-ons, like avocado and brie.