Airline CEO says "People on vacation don't need luggage"

[JPhillips]

Originally Posted by Ksyrup

I disagree with the entire premise, as it works in practice, that there is any subsidizing going on such that a single passenger or a childless couple would pay less than a family of 4 per ticket if it weren't for all of these fees. I fly mostly as a business passenger and not with my family, and I don't see any difference in the cost of flights.

Maybe on these low-cost, ala carte airlines where the base ticket is rock bottom price and you have all of these extras you can purchase this premise works better, but for the Delta, United, American, etc., flights, I just don't believe it. I don't believe that they've added all of these fees to shift the cost of flying to those who use those services, while making a corresponding drop in the base ticket price to reward those who would otherwise "subsidize" those services if free. I think those fees are extra money in their pockets, not a form of re-distribution of costs among differently-situated travelers.

And I think they know that there's no way for us to know the truth, too. If someone shows that base tickets cost more or the same now than 5 years ago, they'll just blame it on the economy or the oil spill or the price of gas or unions or whatever works. I agree in theory with the idea, but I have ZERO confidence it's playing out the way some of you seem to assume it is.

+infinity

The fees are just another way to make money. If they want to be completely "fair" they should charge a flat per seat fare with a scaling fee based on total weight brought on to the plane.

[Logan]

Another big ups to that post.

[Ronnie Dobbs2]

Originally Posted by Ksyrup

I disagree with the entire premise, as it works in practice, that there is any subsidizing going on such that a single passenger or a childless couple would pay less than a family of 4 per ticket if it weren't for all of these fees. I fly mostly as a business passenger and not with my family, and I don't see any difference in the cost of flights.

I'm not claiming that, barring fees, the single passenger would pay less.

Ticket prices are obviously going up. Failing business models, cheap cash grabs, whatever. I'm just saying that if prices are going up and baggage brought onto a plane is one of the things that drives costs up, it makes sense to charge people based on how much they are bringing on the plane instead of just raising every ticket the same amount. I also think that the overweight should pay more, but something like that is unlikely to happen even if it should.

[Ksyrup]

When I say "cost less," I'm talking relative to the market. I still don't believe they aren't raising all tickets the same amount, PLUS adding the fees on top for those who use services that used to be free. That's what I'm talking about. They tell you you're paying less, but you're not paying any less than you would have before. I don't believe that a ticket from here to LA, for example, costs $450 now, plus an extra $120 in fees for me because I'm bringing my family, but if they didn't charge those fees, you and I would both be paying $525 for that same ticket. I don't believe it for a second. The price of the ticket would likely be roughly the same (driven by competition and supply/demand), but they wouldn't have the extra revenue. And the way they try to sell this new business model is to make you believe that in a hypothetical world, you'd pay more for your ticket to subsidize me. I say BS.

[DaddyTorgo]

Originally Posted by Ksyrup

I disagree with the entire premise, as it works in practice, that there is any subsidizing going on such that a single passenger or a childless couple would pay less than a family of 4 per ticket if it weren't for all of these fees. I fly mostly as a business passenger and not with my family, and I don't see any difference in the cost of flights.

Maybe on these low-cost, ala carte airlines where the base ticket is rock bottom price and you have all of these extras you can purchase this premise works better, but for the Delta, United, American, etc., flights, I just don't believe it. I don't believe that they've added all of these fees to shift the cost of flying to those who use those services, while making a corresponding drop in the base ticket price to reward those who would otherwise "subsidize" those services if free. I think those fees are extra money in their pockets, not a form of re-distribution of costs among differently-situated travelers.

And I think they know that there's no way for us to know the truth, too. If someone shows that base tickets cost more or the same now than 5 years ago, they'll just blame it on the economy or the oil spill or the price of gas or unions or whatever works. I agree in theory with the idea, but I have ZERO confidence it's playing out the way some of you seem to assume it is.

Exactly. It's extra money for them - nothing more.

[Passacaglia]

Originally Posted by DaddyTorgo

Exactly. It's extra money for them - nothing more.

Even so, what's the problem? It's not like it's extra money for nothing -- it's a service. Now you have the choice to not pay for it if you don't want to. If you're going to argue that the flight should cost less than it does now because of this, and it's a really big deal to you, I guess the solution is to not fly? Personally, I think it's better to decide on whether or not to fly based on my own situation then on whether or not I think the airline is making too much.

[Ksyrup]

Originally Posted by Passacaglia

Even so, what's the problem? It's not like it's extra money for nothing -- it's a service. Now you have the choice to not pay for it if you don't want to. If you're going to argue that the flight should cost less than it does now because of this, and it's a really big deal to you, I guess the solution is to not fly? Personally, I think it's better to decide on whether or not to fly based on my own situation then on whether or not I think the airline is making too much.

I think it's more that people are buying their argument that it's costing you less to fly than for me and my family with these fees. They are being dishonest in trying to justify a new business model. I'm not saying the industry is doing fine and all that, it's just that they aren't being honest about what they're doing. Everyone is paying more to fly, PLUS the fees are added revenue. The subsidy argument is BS.

[Ksyrup]

This is similar, to me, to the ala carte cable TV stuff.

[Anthony]

there shouldn't be any extra fees for overwieght people. you don't pay extra to go on a train based on your weight. taxi drivers don't charge you more if you have to put luggage in their trunk or if you weigh more - more weight=higher gas costs, but fee is the same. why do airlines need to charge more just cuz you have a fat ass or because you have some kids you need to lug an extra diaper bag or two? just a cash grab.

[Ksyrup]

I don't buy the weight issue, but taking up 2 seats is a legit issue for an industry that sells its product by the seat. I could understand a reduced 2-seat fee on less than full flights, but full price on booked flights. Seems fair to me.

[PilotMan]

Here is the real answer.

From Travel Weekly

As airlines boost their revenue by charging for bags, the carriers are siphoning tax money that the FAA depends on to fund airports and other services, according to a report released today by congressional investigators at the Government Accountability Office.
The Internal Revenue Service has determined that checked-baggage fees are not taxable because they aren’t related to the "transportation of a person" — the basis for imposing a 7.5% excise tax, the GAO noted.

It's pure cash, untaxed.

[DaddyTorgo]

yep!

[Lathum]

Ksyrup and PilotMan FTW.

[SportsDino]

Ya the efficiency argument is a smokescreen, its a cash grab pure and simple. Another sign of the times, where profit is sought more by how best you can screw your customers rather than true innovation or increased production.

[sabotai]

U.S. airlines collect $769 million in baggage fees in 1Q – USATODAY.com

Despite collecting $769 million in baggage fees, $554 million in reservation change fees, the industry made only $12 million in profit in the first quarter. The major airlines as a whole lost money while smaller and regional groups did much better.

[JediKooter]

Originally Posted by sabotai

U.S. airlines collect $769 million in baggage fees in 1Q – USATODAY.com

Despite collecting $769 million in baggage fees, $554 million in reservation change fees, the industry made only $12 million in profit in the first quarter. The major airlines all lost money while the smaller and regional ones did much better.

They must be using Hollywood accounting...

[SirFozzie]

No.. I don't doubt those #'s are true.. the cost of fuel has skyrocketed over the last few years, and that is the #1 expense of airlines.