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Airlines Get Billions From Unbundled Services
Hugh Pickens writes "In hearings before Congress, the Government Accountability Office (GAO) said that airlines reported revenue of $7.9 billion from baggage fees and reservation change and cancellation fees in calendar years 2008 and 2009 — fees on unbundled services that once were considered part of the ticket price. 'We believe that the proliferation of these fees and the manner in which they are presented to the traveling public can be confusing and in some cases misleading,' says Robert Rivkin, the Department of Transportation's general counsel. Published fares used by consumers to choose flights don't 'clearly represent the cost of travel when these services are added.' However, Spirit Airlines President and CEO Ben Baldanza defended the practice of unbundling, saying it allows his airline to charge lower fares (PDF) and allows the customers the choice to purchase the services or not."
I don't have luggage I can't handle alone, I don't drink the crap they serve, I don't eat the latex eagle they serve, so I fly cheaper.
When I travel nowadays I'm increasingly worried that some effect of mine will not pass muster at a security checkpoint. My options would be:
1. Do not take that flight
2. Hand over the item to TSA douchebags
3. Pay extra to check the item
It's enough to discourage me from plane travel.
SIGERR: laziness exceeds quota
If they're making billions (from unbundled services) that they weren't making before, then they obviously didn't lower fares all that much.
This is good for them, not so good for us.
[Fuck Beta]
o0t!
This is what really pisses me off; people take this attitude that, hey..I don't have extra bags, I don't want the food, so I am flying cheaper! Well guess what stupid, you're not flying cheaper.
I travel very often so I have a fair idea of how the traveling costs trend and what I notice is that I get fucked harder and harder by the airlines, but since there is price fixing, there's not a damn thing I can do about it.
Don't get me wrong, if the tickets WERE actually cheaper by not including the bags, than I would be fine with that. BUT, they are not cheaper. If anything, they are more expensive AND you pay your extra 100 bucks for bags. WTF?
You want to go by weight? I weight 160lbs and my wife is 105lbs. Why should she pay the same like me? Why can't she have an extra bag?
Why can that fat as fuck American sitting next to me get the same price?
They should chance the whole thing to per lbs, yourself and bags included. That is whats fair.
Isn't Spirit airlines the same airline that will charge you for luggage whether you check-in or carry-on. How many people travel with no luggage? Simply put the only choice Spirit offers you is whether you pay them more to handle your bags or pay them less for the privilege of handling your own bags.
Well, there's spam egg sausage and spam, that's not got much spam in it.
One of which is the excessive amount of carry-on baggage that people now bring on to planes. Instead of checking that larger bag and only bringing the laptop case/bookbag/etc on the plane, everyone tries to cram as much stuff as they can in their two carry-on bags so they don't have to pay baggage fees. On the airlines on which I have traveled they tend not to enforce the carry-on restrictions tightly, so many people bring oversized bags which monopolize the limited space available. As a result, you pretty much have to hover by the entry area on the concourse and rush on to the plane to ensure that you will be able to find a place for your single bag. Moreover, this rush for space creates a lot of tension between passengers. On planes with limited carry-on space I have seen arguments break out between patrons over the bag placement. It's distinctly unpleasant to be crammed into an aluminum tube while two people trade insults over space for their laptop case.
With our brilliant free market capitalism in place, a competitor should be here to the rescue to innovate and beat the crap out of these guys who don't take care of their customers. For we have a choice, and that makes our way of life the envy of everyone.
Any minute now. Any minute!!!
I am also waiting for a better cable company, better internet service, a better bank, and oh, a better PC...
Any minute now!!!
I find it interesting that the airlines have unbundled services so that they can "lower air fares", yet they still can't seem to make profits the way they used to. This article in the NYT (see link below) points out that while passenger and freight volumes are back up to pre-recession levels, the airlines are still not making pre-recession profits. Another point that I found interesting is that passenger load factors are also significantly higher in the past. So from a cost-accounting perspective, the airlines have reduced or shifted several large factors in their cost bases: underutilized aircraft, "fees" for things that used to cost the airlines extra, and industry consolidation that should also reduce employee costs (two merged airlines don't need as many mechanics, pilots, or flight attendants). A couple more points should also give some food for thought. The aforementioned industry consolidation gives the airlines more power to raise ticket prices because of reduced competition (and fewer routes). Also, oil prices are not nearly what they were in 2008/2009, so that's another large expense that has been reduced.
The point I'm trying to make is that the airline industry has seen major shifts that should in theory increase revenues while decreasing expenses. Something else must be going on and I don't have the whole story, but it makes me wonder if there is some serious mismanagement going on. Or maybe unbundling combined with all the other hassles of air travel are starting to make customers change their behaviors.
http://www.nytimes.com/2010/07/19/business/global/19iht-ravover.html?_r=1&ref=business
1) You are going somewhere with a large climactic difference from your present location.
2) You are going for say, a month. Oh and yes it is on Business so you need suits and formal shirts.
3) you need to take a laptop.
4) the flight is say 10+ hours.
Then the airline only allows 5 or maybe 10kg of carry on which they weigh every item.
Frankly you are stuffed. You have have to pay.
Kerching. Kerching. Kerching. Dig deep my friend. You have just made the airline lots of money. Welcome to the Machine aka Cattle class on budge airlines.
These so called 'low cost' airlines are in many cases more expensive that full service ones. I've just returned from a week in Budapest on Business. SleazyJet was £20.00 each way more expensive than BA. Add to that, I live much nearer Heathrow than Luton then guess which carrier I chose.
Don't even get me started on LyingAir (RyanAir) who wouldn't let me take my Nikon 200-400mm Lens (worth $6K) in the cabin with me and oh, they wouldn't insure it as hold baggage.
Did I say I'm a pro photographer? Guess how much kit I can take with me even when travelling light? 21kg is normal. Full fare airlines see that it is pro gear and say 'carry on? No problem'.
Low cost? forget it sunshine. I'd rather drive or take the train.
Watch out LyingAir want to make you stand for your flight if they have their way.
Nothing different that a commuter train really. but do you want to stand during turbulence?
Nope I though not.
The problem with the current system is you can't compare costs easily between airlines. Plus if you have a complaint your only option in most airports is to suck it up and do what they say. Even if they are clearly in the wrong. If you complain to vigorously, they involve security, which makes flying in the future more of a pain in the ass. They avoid the overbooking flight rules, by offering useless credits for future flights, that can only be redeemed for places nobody wants to go to at times nobody wants to fly. You can't walk away and not use them when poor service angers you. Tickets are mostly non-refundable, changing flights has a ton of silly rules, airline employee's have no incentive to keep you as a happy customer, so canceling you flight on one airline normally means to pay out the nose to file another equally poor option. Plus if you fly a lot, but with multiple airlines, you are still treated like cattle, because you don't have status. It is a broken industry, that needs to be disrupted, but high capital costs, limited access to gates and no viable alternative have left us no choice.
If so, then good for them. The airline industry has been a huge money loser for a long time, while providing an extremely valuable service and putting up with every kind of obnoxious government interference.
How would you like to try and make a buck when you can only do business in centres set up by the government to make your service and your competitor's service available right next to each other, while regulations require your two services to be virtually identical so that you can only compete on price, and the government also harasses and intimidates all of your customers as they pass through these centres?
Airlines should probably be treated like public utilities, if not actually socialized. They are already so heavily managed and burdened by government that they can hardly be called free enterprises.
When heading into the States not long ago I had to transfer through Chicago O'Hare to a smaller, provincial airport. American Airlines unsurprisingly lost my luggage, but thanks to a tag it was located as being with the handlers back at Chicago. The friendly woman at the check-in desk where I'd arrived after the second flight gave me a complimentary kit that included a toothbrush, toothpaste, mini-haircomb and so on.
The expedient service was what struck me most though; the next day a guy in a van drove up to where I stayed and dropped it off needing a signature and ID to confirm. All this was free, all of it was worked out and the lady at the desk looked astonished at me if I asked there was a fee to expedite getting my suitcase back - it contained mostly clothing that I could buy at a mall or whatever, but also a few items somewhat more important.
AA must have yearly meetings where this baggage issue is brought up; remember that scene from Fight Club where the anti-hero played by Ed Norton opposes the cost of keeping a shoddy system with unhappy customers that might kick up an occasionally costly issue to fixing everything and performing a good service. If the good service is more expensive than paying customers off, and in the case of improving baggage loss rates it likely is, then AA keep the crappy service to the inconvience of customers.
As cynically compelling as that movie was, this principle is applied rigorously behind closed doors in many firms who simply seek to maximize profits by definition of what they are. If it means a person losing something valuable or otherwise getting aggrieved (crashing a shoddy car and being injured), then let's cast that aside and keep the margin at an acceptable level. Unethical? Sure, but that's business.
That airlines are now charging seperate fees for this service without presumably making a marked improvement could be harmful to them in the long term; if passengers know they're paying X for luggage carriage for every piece inclusive of the first then they can more directly demand a refund. Something which isn't quite as easy to do if its bundled in and you get chucked a cheap kit of goods to clean up that they manufacture in quantity. So this all could be a good move with respect to luggage, as it might make firms like Delta or AA or anybody else with high passenger volume improve somewhat.
Why does the government care? They now get a lower tax revenue! Before, if your ticket cost $500, they got whatever percent (let's say 10), so $50. Now if they strip down the ticket so that it's only $400, plus $100 in other fees, the government is losing $10 they would've previously received. Food, baggage, seat placement, etc, all get taxed at a lower (or non-existent) rate when they're sold separately.
It will be just a matter of time before Orbitz, Travelocity, Expedia, or an upstart comes up with a "Bottom Line Price" website that takes into account the number of bags, food preferences, etc. that you input (note that they already take into account airport fees and taxes). In the meantime, the airlines are exploiting the cost of individuals to indepently acquire this information. The airlines figured out a way to re-intermediate the disintermediation that the Internet introduced. The Internet will route around this disintermediation.
Except the don't explain the charges well enough, and not all are optional anyway.
---- Booth was a patriot ----
If you fly an airline that charges for checked bags, and you accidentally put a banned item in the carry-on, you either have to pay the fee to check the bag, lose the item, or mail at a high cost (if you have time). Probably this isn't a very big revenue generator, but I still find it annoying. The same goes with banning bottled water then selling it for $3 a bottle. Or setting up long security lines, then letting people through who pay a higher rate. This last one seems undemocratic. Its different than having better 'first class' seating for people who pay a premium, since the security lines are mandated by the government, not by the airline. (Though 'first class' seating is discriminatory also, if companies are getting breaks on their ticket prices that aren't available to everyone.)
Whatever happened to "live free or die"?
Get all the mad you want - it won't do any good. They're providing a service that you can't get anywhere else and people are paying their prices so they have no reason to change.
Supply. Demand.
No sig for you. YOU GET NO SIG!
With our brilliant free market capitalism in place, a competitor should be here to the rescue to innovate and beat the crap out of these guys who don't take care of their customers.
There is, Southwest Airlines. No bag fees (a fact which is heavily advertised).
The thing people like you don't realize is that capitalism is not an instant fix, but it does fix things in the long run - Southwest has been very popular and is expanding to more cities and locations. I can take that airline to a lot more places in the U.S. than I used to be able to, in part because of better customer service that made sure I would fly Southwest unless there was no other choice.
How is that not capitalism in action?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
TANSTAAFL
This simply saves me money. I don't want to pay the hidden imbedded cost of the "bundle" like it was a few years ago. Now it's better. I pay for value.
Now. I am also for full disclosure so that if I have a bag, extra bag, change in plans, or want a meal, I know what's comming
I am also waiting for a better cable company
That is impossible as long as government controls block competition for your cable dollar (satellite doesn't really count being essentially unidirectional). So while you are railing on capitalism the very regulation you wish to impose on airlines is denying you choice in cable.
better internet service
See: Cable.
a better bank
There are great banks if you are willing to look beyond the monsters.
and oh, a better PC...
Found it.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The problem is that the competition takes place on web sites like Orbitz or Travelocity where the only criteria for comparing airlines is route and ticket price. There's no indication of whether a particular airline charges extra for checked bags, carry-on bags, or refreshments. Nor is there any indication of how much leg room to expect, how often the airline departs on time, or how often the airline leaves passengers on the tarmac for six hours.
When the only information passengers have is route and ticket price, the airline that can scheme to have the lowest upfront price will win.
Admittedly I don't fly a lot in the states(I do occasionally on business, but at least for the time being transcontinental flights have free baggage...) but it seems that the baggage fee policy more often than not causes delays due to people futzing around with the overhead bins. These bins invariably become full and then the flight attendant always comes on and announces that they will now check bags for free, which kind of defeats the whole purpose of charging for a checked bag to begin with. A lot of seasoned flyers know this and intentionally pack huge carry-ons(which almost never get weighed/measured even though the airlines could conceivably do this) because they know they will be allowed to check them for free after they get on the plane.
By the time all this crap gets settled it's usually 30 minutes after the scheduled departure time and all the airline has done is cost themselves money and pissed a lot of people off..... brilliant!
Monstar L
One change that they introduced some months back was a charge on credit card use. Because they have to offer one form of card payment without charge (a UK or EU law) they chose a card that almost no one uses -- a prepaid card that costs some £15 a year and a 50p transaction charge. It is all about grabbing as much money from their customers through hard to avoid extra charges so that they can make decietful adverts claiming to be cheapest.
Real economists, not the political panderers most people think are economists, have three words for you. "Barriers to entry."
Check in agent are supposed to look at the baggae you have, and at least their volume. Under a certain volume (basically a small luggage)you should be fine , but above that volume you normally are forced to register the baggage. Furthermore you can only have one big carry on AFAIK. Anything above is airline's tolerane.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
Yeah, putting the government in charge would _really_ improve airline travel.
You say that as if they weren't already in charge, through extremely restrictive regulation.
The airlines are part of the transportation infrastructure. You could as easily leave road-building to unregulated private citizens as airlines.
Jet aircraft are noisy and dangerous. Air traffic is a nuisance and a hazard. They need big areas to land in and take off from which should be as close as possible to major population centers, so they can't really be built without the application of eminent domain, and access to these airports needs to be negotiated and scheduled. People and goods coming from international flights need to go through border control, and therefore the whole facility needs to be securely under government control. It's not feasible to avoid having government stand between the customers and the service providers, except in a few special cases (i.e. regional service between airports in rural locations).
With the type of aircraft operated by airlines, going between the locations the airlines use, strict government oversight is something that is unavoidable. Perhaps in the future less costly, more versatile, safer aircraft, combined with greater energy resources, will change this, and allow air travel to be even less restricted than road travel.
It costs money to fly you. It costs more money to fly your bags. If I'm not bringing any bags, I don't want to pay for your bags. If I'm bringing bags, I'll gladly pay for them myself. This is a much better solution than before. You can't complain about airlines screwing you over... think how many airlines have gone out of business in the last decade. Many haven't even made a profit in quite some time. How can you blame them for raising prices if they aren't even making a profit?
I love how these idiot slashbots just spew out nonsense thinking they're so brilliant, and then someone calmly points out their idiocy with one example.
This is classic pwnage here. Hope this shuts up retards like v(*_*)vvvv for awhile.
SouthWest
Their ticket price may be a few bucks more but..
They don't nickle and dime me.
They don't charge to check your bag.
They don't charge for the crappy airline food.
They don't have assigned seating
They are easy to deal with.
And they seem to adapt to the times.
You check your self in online the night before. The people who check in 1st get a lower boarding group.You print your boarding pass at home.
When you get to the airport you hand the well staffed baggage desk your bags and check your self in on the touch screen where you have the option of reprinting your boarding pass if you lost it.
When i get to my airport I look over at the other airlines and see 2 people trying to deal with lines a mile long. Southwest has 4 or 5 people working the check in and hardly any line.
Southwest changes with the times and makes a profit. They seem to understand that if you make your customers happy they will keep coming back.
Everyone else is operating the same old inefficient way..pissing people off.. and loosing money.
I have to return some videotapes...
I was recently booked on a Delta flight (the last one of the evening) from Rochester, NY to Detroit, MI (first leg of a two-leg connecting flight) that was cancelled due to an "Operational Decision" 90 min before the planned departure. Some people were told weather, some mechnical, most (including me) were told it was a decision.
Look, if you're going to cancel a flight for a real reason, ok - I don't like it, but it happens. Don't decide that me and all my co-workers can't go home tonight because you decided not to fly your regular route where we had all paid for tickets. Also, if you're going to decide not to fly the plane (probably because you weren't making money on it) - then you should have to pay for hotels for stranded people when it's the last plane of the night. My company would have paid for a hotel (if I didn't end up taking a different plane), but I saw a young couple stranded asking for a hotel for the night and they were told if they could find a room and mentioned the airline, they'd probably get a discount. DELTA decided not to fly, then were like - hope you can find a room till tomorrow! Maybe you can try to get a discount!
Oh, and they tried to "helpfully" auto rebook us out the next morning. To JFK, on a now three-leg connection. Except that the second leg was NEWARK to Minneapolis. Thanks Delta for putting us on connections that didn't actually connect. Fortunately I was able to switch to an American flight that same night that ONLY had a 2 hour delay - and that was non-stop if you don't count that I had to drive the last 200 miles till late in the night.
trains the Airlines aren't having much competition to compete for consumers domestically. Fix that and you'll see a ton of business fliers going rail to have their own private slot with access to land based communications. Yes, they will convert if it's built.
I think airfares are too low. I'd gladly pay 50% more for my tickets to have a bigger seat, more legroom, better service, fewer people rushing for the overhead compartments on the cattle car, etc. The problem is that I don't want to pay 3x - 10x as much to go to business or first class. So the airlines are failing to provide me with a product I want to buy - an improvment over cattle car, for more money, but without the outrageous price of first class.
I'd be very happy to pay more and have fewer people on those planes.
Saying that checked baggage is an optional service is akin to a restaurant charging fork fee atop $40 for an entree. Ticket prices have gone up since the introduction of these fees, and the TSA's security theater make it very difficult to carry on baggage. Airlines have employed an unsustainable economic model for decades, and they are buried under a mountain of debt and high fuel prices. Bottom line is that I want to pay for a ticket and not be knocked up for 25-50% more when I get to the airport. It also be nice if they stopped their price fixing, and actually engaged in some price and service competition. Instead, airlines seem to look at each other to determine how little they have to deliver for high a price.
They advertise $100 tickets then you get stuck finding out there is:
Airport Fee $10 (2x)
Gate Fee $10 (2x)
Drink Cart Fee $10
Fee Summation Fee $5
Pressurized Cabin Fee $10
Baggage Scanning Fee $10
Baggage Loading Fee $5
Baggage UnLoading Fee $15
Airplane Taxiing Priority Fee $10
Advertising Fee
SABRE Ticket Processing Fee $5
Convenience for not requiring human intervention in purchasing tickets $5
Do you really think you can fly from SF to LA for $99? No. Because the damn fees for everything. I'm waiting for those airmasks to have the following instructions on them:
In the event of a lose of air pressure, please secure the mask to your face. Take a calm deep breath and then exhale normally so that it is replenished for the person in the seat next to you.
Can you imagine if McDonalds did this shit?
Ordering Fee $10
Cooking Fee $5
Putting paper on food tray Fee $5
Fee Per Ketchup $1
DriveThrough Convenience Fee $10
Spill proof lid $10
Straw ($2 per)
Hot food guarantee Fee $10
Yyyyyeah. There do exist those of us who would rather not fly Redneck Air.
Just like there used to be people who liked to hang other people on crosses, or set them on fire for witchcraft, or string them up on nooses because of the color of their skin.
I'm not sure how you feel about joining the ranks of such distinguished company, but there's very little at this point between you and them. I'd think about that were I you.
Myself, I am open minded to people of all backgrounds, and they can make whatever cringe-inducing rhyme they like in return for providing an airline with no bag fees, no flight change fees, and letting the technologically ept sit wherever they like in the plane by getting first dibs on seats.
If you are going to let your prejudices get in the way of that then at least the only one harmed is yourself - but it still comes off as pretty stupid on a site filled with otherwise intelligent people.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Not trying to change your point but... do you know many people that have half a year's salary saved up and readily available? I don't. You may think that "readily available" are weasel words. They're not. It's an important point.
I don't know his parents' reason for visiting the relatives - and frankly, it's not my place to judge what's a valid reason or not.
Yes, air travel was ungodly expensive back then, but people still needed to do it for whatever reason. And a bank loan was often the only way to quickly gather the money needed.
To me it boils down to two things. First, is this really an optional service or is it something I have no choice but to have? Things like checked-luggage charges or reservation-change fees, I don't necessarily have to buy those services. I don't always change my reservations (in fact I usually don't), and I may be traveling with only my carry-on (in fact I prefer to do that when I'm flying if I have any choice in the matter). Other things like gate fees I'm going to have to pay every single time, no matter what. To me, if I can't decline to pay it and still be able to fly then it should by rights be included in the ticket price. To call it "unbundled" is simply deceptive, it implies something's optional when in fact it's not.
Second, for truly optional services, are the terms clearly disclosed? When I buy a ticket I should be able to clearly see how much my checked luggage will cost me, how much it'll cost me to change or cancel the reservation later, how much all those unbundled services will cost and what terms I'll have to comply with. The big problem I have with the airlines is that most of the time they don't clearly disclose any of that. Last time I bought airline tickets, it took half an hour of digging to answer a simple question: what would the baggage fees be for 1 checked suitcase per person? You couldn't find this when you bought the ticket, and it took major digging into the help section of the airline's web site to find the answer. And even then it wasn't a straight answer, just a list of conditions and prices that you had to compare to your ticket's terms to match up. When I buy a ticket I ought by rights to be able to just see a list, for that particular type of ticket and that flight, how much it'll be per bag for standard and oversize/overweight bags and what the maximum number is. I know this isn't hard to do, I program computers for a living and this kind of database query and calculation's something it takes me maybe 1-2 working days to do. Note: "does take", not "would take", like I said I do this stuff for a living and I get exactly that kind of task on a regular basis.
This is because of the lost baggage tracking system used by most airlines (world tracer / Sita). Most lost baggage from big company are entered in it, including bag tag, telephon, address of stay of the person, or original address, and once a "masterless" baggage is found it is checked against that list, and either forwarded on the next flight (the most usual choice) or shipped to an address of choice with two weeks. The airline don't lose intentionally baggage, that cost them a lot of money to track them down. The problem is that most if not all baggage handling is in the hand of the airport, which may or may not have the same incentive to properly track baggage.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
The last gigantic person I sat next to on an airplane was Mexican, not American.
So there.
I started flying in the 1960s, when fares were high and quality was excellent. You want to go cheap, take the Greyhound. In the meantime, I want the service I used to get in those days, which was excellent -- even if it means putting up the fares.
Elitism? No. I just want a better product and I'm prepared to pay for it. This includes not being scanned and groped by strangers, by the way.
Oh, and "business class" isn't it. You still get scanned and groped by strangers.
I piss off bigots.
Southwest flies to 69 cities in 35 states.
Albany, Albuquerque, Amarillo, Austin, Baltimore/Washington, Birmingham, Boise, Boston Logan, Buffalo, Burbank, Chicago (Midway),Cleveland,Columbus,Corpus Christi,Dallas (Love Field)
Denver
Detroit (Metro)
El Paso
Ft. Lauderdale/Hollywood
Ft. Myers/Naples
Harlingen/South Padre Island
Hartford/Springfield
Houston (Hobby)
Indianapolis
Long Island (MacArthur)
Jackson
Jacksonville
Kansas City
Las Vegas
Little Rock
Los Angeles (LAX)
Louisville
Lubbock
Manchester
Midland/Odessa
Milwaukee
Minneapolis/St. Paul
Nashville
New Orleans
New York (LaGuardia)
Norfolk
Oakland
Oklahoma City
Omaha
Ontario
Orange County
Orlando
Panama City Beach
Philadelphia
Phoenix
Pittsburgh
Portland
Providence
Raleigh-Durham
Reno
Sacramento
St. Louis
Salt Lake City
San Antonio
San Diego
San Francisco
San Jose
Seattle/Tacoma
Spokane
Tampa
Tucson
Tulsa
Washington, DC (Dulles)
West Palm Beach
Ive been coast to coast and many places in between on Southwest. I'ed say they do good for an airline that doesn't go anywhere
I have to return some videotapes...
Once again, the race to the bottom of the price bucket rears its ugly head
Back in the days when the flight industry was regulated, airlines made a decent profit and the service was stellar. Pilots ( the guys who your life depended on) made great money and so did everyone else, right down to the guy who fueled the plane. I remember flying form San Francisco to Hawaii just before deregulation was signed into law. The flight was called "United Champagne Service to Hawaii" and it was exactly what they said, as soon as the fasten your seatbelt light went out, the corks popped and it was a lovely flight, plenty of leg room in coach and bags just weren't even a question.
Then Deregulation hit, the problem was they didn't "deregulate" all the labor contracts along with the ticket prices. The airlines had kept everything in line with labor, operations, fuel and maintenance costs, uhm can you so Ohhh shit!"
So now we have a fuel market that is basically unpredictable ( Southwest had the foresight to but fuel futures ), airplanes are more or less as reliable as they ever were but the maintenance cost keep going up as do landing fee's. So all they have left to do is to drive the cost of labor down and start removing the plush.
The best data I can find says it costs around 2400.00 USD plus Fuel to operate a Boeing 737-300 per hour. One of thee configured for all coach seating ( Southwest style ) holds 130 passengers. Southwest regular fair ( Not specials etc. etc. ) is 189.00 from San Francisco to Las Vegas. That is 1 hour and 25 minutes of flight time, so for sake of argument lets call in 90 minutes. So 130 * 189.00 = $24,500.00 fully booked. Now en route fuel consumption is around 900 gallons per hour and Jet A is running about $2.00 a gallon so that means it costs $1800.00 per hour for fuel so our hourly is pushing up to around 4200.00 per hour. 1.5 * 4200.00 = 6700.00 to get the airplane from SFO to Vegas. So IF they have the airplane fully booked with NO web specials, discounts etc. etc. it is $24,500 - $6,700.00 = $17,800.00 in net income from that flight.
Now todays web special for a flight booked over a month in advance ( as the other full fair fee was ) is 59.00. If the fill the plane with those then it is 131 * $59.00 =$7,729.00 so now net profit is $1029.00 which is not so great.
All that aside those figures do not include things like pilots or flight attendant salaries or any other group of people being paid, not to mention all the other costs associated with running an airline like insurance etc. etc."
SouthWests net income for the most recent quarter was 11 million. Not a whole hell of a lot considering their Total Revenue was 2.5 Billion, and they are a publicly held company.
Hey KID! Yeah you, get the fuck off my lawn!
While booking a WestJet flight recently I was annoyed to discover that the ticket price did not include the seat I would sit in: that was $10 extra.
Now I can see charging extra for a window or aisle seat, or one behind a bulkhead. But that wasn't the case here. All of the seats on the flight were the same price.
Does this mean that I can forgo the seat and fly standing up? Not a chance. Unlike meals or baggage the seat is mandatory, so it should be included in the price. This isn't fare rationalization, it's just a cheap attempt to bamboozle passengers into thinking they're getting a better deal than the really are.
-deane
With our brilliant free market capitalism in place, a competitor should be here to the rescue to innovate and beat the crap out of these guys who don't take care of their customers.
The free market spoke. They all went bankrupt.
Then they got a government handout (hint: not exactly part of capitalism).
If you think the airlines have ANYTHING to do with capitalism then I've got a bridge and some land in Florida to sell you.
Ryanair's CEO has the right idea, "beds and blowjobs" in first class! (In economy you have to pay for it) http://www.youtube.com/watch?v=UfIY24BErBE
Because the administrative overhead will be more then the airlines will actually save.
Per KG, per KM we are talking about cents in fuel, (which is the only measurable that can be used for weight) so the difference between a 120 KG man and a 50 KG woman ends up being about $5-10. Big saving there. It will cost more to have this system implemented (new scales need to be installed, staff need to operate them, another line at the airport) and lets not mention the bad press, most people commenting on this will be thinking of the lard arse male, they will not be complaining as much as the 75 KG women who really hate their true weight being known.
Besides this, many of the actual costs are fixed per seat. It costs the same amount per seat to staff the plane, the same amount per seat to maintain the plane, the same amount per seat to land the plane and use airport facilities. These costs do not fluctuate between 50 and 150 KG's. The only time where this should be a consideration is when a person is so large that they cannot safely occupy one seat (thus will need two or not fly) but I believe there is already rules for this in place.
Calling someone a "hater" only means you can not rationally rebut their argument.
Singapore airlines and Emirates have that kind of service, it's only about $5K for a business class ticket. But then again the economy class service on Singapore is excellent.
Oh, you meant an American airline, sorry mate, your SOL. At least when you travel internationally you'll get a choice of decent carriers, I don't know a single yank who'll take an American carrier out of the states.
Calling someone a "hater" only means you can not rationally rebut their argument.
Right now, when you visit a ticket site, it just asks departure/return dates and locations, and just shows you base ticket prices.
When a few people start getting upset that they really paid a lot more, and complain, this is what's going to happen:
Travel sites will update their interfaces to ask how many bags you are carrying, whether you'd like a meal, curb-side pick-up, etc., etc.
Customers will input that information, and the ticket price shown will include all those fees.
Airlines that have fees will actually cost more than those who offer a flat bill with everything included, so people will flock to those who haven't resorted to this trend.
All other Airlines will see the trend, and drop their extra fees.
The end.
Add-on charges add overhead, which means the charges have to be high enough to account for the extra hassle, and also high enough so those who opt-in also cover those who opt-out. In short, individual fees will always be more expensive than a flat ticket price. They're in-vogue now only because not everyone is aware of them, and there isn't an easy way to compare ticket price+fees just yet. In the medium-term, people will learn the tricks, take them into account, and all will be right with the world again.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
No part of any Passenger Facility Charge, Sept. 11th Security Fee, or any other local airport tax or surcharge on airline travel, shall be spent on first-class air travel for any directors, managers, or employees of the local airport authority that collects the fee or tax.
I recently flew to from Chicago to Ethiopia (switched planes in Istanbul.) I had never been outside the united states prior to this trip so I was rather surprised that I got free food, free drinks, no charge for my bags. The flight attendants spoke very little English but in comparison to my experience on US airlines they were practically falling all over themselves to help me. The food was exceptional, as good as any decent restaurant. The attendants were bringing me a drink at least every hour or 2 and if I wanted one sooner I just raised my hand and they handed be the jack and coke I had been ordering for the past 15hrs (long plane ride.) All this, and the tickets weren't that expensive (considering the legth of the trip.) I know the airlines like to blame the price of gas and the failing economy for their troubles, but I just like everyone to consider this: The price of gasoline in Ethiopia the day I landed was $8 a liter. 70 percent of the population of the city I landed in was homeless. The average wage, for the few that did have a job was $100 a month. At the hotel we stayed at, the girl that worked at the front desk, slept at that desk every night we were there. If we needed anything we just tap on the desk to wake her up. If anythings driving up the price of air travel in the US it's the pure incompetence of the airline management, not the economy.
Failed aircraft.
Busted ticheting system.
Service personnel on drugs.
CEO pedeling cocaine.
Lost luggage.
Cancelled tichets ... who the FUCK cancelled the FUCKING tichet!
The best future for Delta and all employees, is death. The CEO, CFO and Board Members, should never have lived!
I do hope their headquarters become deadquaters ... and the CEO, CFO, and Board are evaporated into air with a M86 detonation at 500 ft above their Atlanta hi-rise. What a beautiful sight thet would be. Victory!
I'll gladly supply the "specs" to hi-jack a B52H to deliver the goods. I'd like to be along for the ride and photographing the destruction.
On the bombs I'll write, "Huges and Kissess, XXOO, Burn Hitler Burn."
haha
Life is too short to wait a decade for the mythical "competition" to maybe sorta improve the airline market
And it's far too short to suffer through the short and long term effects of regulation, which remove all choices from the consumer and take decades to unwind (if you ever can).
At least capitalism holds the promise things might get better; unlike regulation which holds the certainty of things becoming worse, and shortly.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
good luck flying Southwest to London or Japan.
I'd love to if I good.
However it's unrelated to the discussion at hand because international travel does not impose baggage fees.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you are flying for business reasons, there may be a requirement to take the cheapest flight.
Everyone knows that only terrorists travel with no luggage.
Southwest changes with the times and makes a profit.
Southwest is a company I respect and I fly with them sometimes but there is much not to like about their service too. The main thing I think they have going for them is that they have come to grips with the fact that air travel is not a luxury item anymore. It's a bus that flies - nothing more. I don't dislike Southwest but they aren't perfect by any means.
Generally I'll look at Southwest as an option but they simply aren't flying many of the places I go.
Airlines make money by keeping the high priced airplanes in the air full of passengers. Some are better at controlling costs than others, requiring the poor performers to charge more to stay profitable. The biggest problem is airlines have lost some of the power to control ticket prices from everyone taking the lowest fair from travel sites. The easiest way for them to overcome this is to disrupt the pricing mechanism by hiding fees.
Since the end of the Second World War there has been a proliferation of wealth amongst the richest nations of the world meaning that now there are far more of us with a large amount of disposable income in our hands. Corporations have taken advantage of this by providing goods & services that make things easy for us on the basis that we don't mind parting with our money to have easy lives.
I'm lucky in that I work in the Telecoms/IT Industry and have a stable consulting job with a few big clients who are happy to pay good money, year-on-year, for my services. However, like just about anyone else outside of a CEO role or the banking industry, I've not had pay rises or bonuses over the past few years - yet I have more money than ever at my disposal.
The reason is simple - my wife and I have taken a long hard look at where we spend our money, done a lot of research & made some large cash savings as a result. Over the past few years, we've changed banks, house insurances, energy providers and kept our cars a bit longer rather than buying new ones.
We also fly quite a lot and, again, whereas we used to fly with one airline in order to enjoy member benefits, when those benefits were taken away by that airline one-by-one as a cost-saving, we started getting our flights as cheaply as possible as well.
It's got to the point whereby we now only travel with carry-on luggage & take our own snacks & non-alcoholic drinks on-board aircraft in order to avoid the high costs from the airline. What we have learned is that you do not need 3/4 of the stuff that you usually pack anyway.
I imagine that a lot more people are also becoming a lot more frugal during the economic downturn - this means that airlines and other companies need to become more inventive in how they make their money & it's inevitable that they will try to capitalise on those people who don't watch their money so carefully - things will therefore only get worse.
So my advice is to look at how you are spending money very carefully and do the research for cheaper goods & services as I'm sure most people can make some immediate cost savings without any real change in their lifestyles. And for airlines particularly, read the small print, use bags that are the right size for carry-on luggage & weigh them before you leave for the airport.
Also check if the airline adds a booking charge for certain types of payment card - here in the UK, RyanAir is renowned for that little trick but in order to add that booking charge legally in the first place, they need to accept at least one type of card (in this case a prepaid Mastercard designed for those with low credit ratings) where they do not apply the booking charge; so if you fly regularly with them (like we do) then it makes sense to get and use one of those cards.
So there's no point sitting back & moaning about how everything costs more these days - take some responsibility, stay one step ahead of them & learn some frugality.
Gentoo Linux - another day, another USE flag.
Oh, and "business class" isn't it. You still get scanned and groped by strangers.
Yes, it's a well-known fact that impoverished terrorists cannot afford business class seats...
Gentoo Linux - another day, another USE flag.
Customers already have the choice of which airline to fly or whether to fly at all.
In any case, I think it's exceedingly hypocritical for the government to paint the airline industry as the "bad guys" when it's the federal government that has single-handedly destroyed the airline industry (at least in the US) by adding hours of senseless "security" bullshit to the process, and imposing billions in hidden costs.
The last time I flew from PHL to ATL, my door-to-door transit time was nearly 15 hours... it takes 13-14 hours to drive. Seriously, when flying can't take you 800 miles any faster than driving yourself, what the hell is the point?
> Changes under consideration would require full disclosure of "mandatory" costs, including taxes, fees and other charges paid by all travelers, as well as full disclosure of optional fees for checked bags, seat selection, refreshments, blankets and other services, Rivkin said. In addition, the department might require reimbursement of baggage fees when bags are not delivered on time, he said.
Let's see WizzAir, a small to mid-sized european truly low-cost airline with some 25 pcs fleet of A-320 planes, per 180 seats each. European routes only (1-3 hour lenght flights), often goes to very much county-side airports and usually in late evening or dawn, early morning periods for cheapness. It's people are still incomparably nicer than Ryanair.
Fully taxed and surcharged ticket for about 800km/500mile/1h:20m (e.g. Central Europe to Venezia, Italy)
with web interface price, about 7 weeks in advance: 3999huf (i.e. 16 basic cheese-burgers)
Bank transfer fee for ticket purchase: 750huf (3 chbs)
or
Credit/debit card fee for ticket puchase: 1500huf (6chbs)
Self check-in print via web interface, 3h-7days in advance: free
Check-in at airport booth if pre-paid: 1375huf (~7chbs)
Check-in at the airport booth if paid ad hoc, in situ: 2750huf (13chbs)
Baggage carry on-board, 1pcs of modest size, max. 10 kilos wight: for free
Baggage in cargo hold, max. 32 kilos, 1 pcs, paid over the web: 4125huf (17chbs)
Baggage in cargo hold, max. 32 kilos, 1 pcs, paid at airport: 8250huf (34chbs)
Insurance for delays over 2 hours: 2750huf (11chbs), returns 27,500huf or 110chbs
On-board 0,33l coke can or 0,5l mineral water, 1 pcs: 750huf (3chbs)
Lavatory use (3 or 4 cubicles per plane): WC use is still free
No fixed seating for quicker embarking
Customer service over payphone: 1chb / minute
Customer service over e-mail: free, but never expect a reply
Being a low-cost airline, it does not guarantee meeting even its own connecting lines, so you have to plan with very generous tolerances for a multi-leg journey. Low-cost airlines typically have tero or just a single spare Airbus in the fleet, so if one plane is seriously delayed or grounded for tech problems, the whole european route map will see havoc and many spend the night in airport lobbies.
BTW, they have never been profitable in 5+ years, living off venture capital. Some expect them to fold in 2010 or 2011. Everybody says their services are too decent for such a low price.
No, it wasn't.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
That prepaid card company would not exist except for the law requiring all vendors accept at least one card for payment. The law will eventually be fixed to make sure that the one card accepted meets some minimum reasonableness criteria. There will be people hired into some agency that will periodically verify various card services for compliance and keep a list of which ones qualify. This will initiate a race to the bottom in which all card companies will attempt to barely qualify.
refactor the law, its bloated, confusing and unmaintainable.
Yes, it's a well-known fact that impoverished terrorists cannot afford business class seats...
Well, there weren't any terrorists in any class of service in 1965. Now *I* didn't do anything to encourage this kind of terrorism, so I have to conclude that somebody else did; and I want that person found and shot.
I piss off bigots.
"Lard ass," eh? Thank you for grouping me into that category. I can't help the fact that I am 6'8" (2.03m) tall and weigh 247lbs. That's before clothes and shoes. Asshole.
Why do you think that money buys you exemption from national security compliance? Just curious.
To have a right to do a thing is not at all the same as to be right in doing it
Why do you think that money buys you exemption from national security compliance? Just curious.
National security is not at stake when I ride an airplane. The last time the continued existence of the United States was threatened by an airplane was when the Soviets had hangars full of bombers with nuclear weapons in them.
Terrorist attacks cannot destroy the Constitution. Only a President and a cowardly populace who will give him anything he wants because they're frightened can do that.
I piss off bigots.
But the simple fact is things like moving and tracking your bag does cost the airline more money. Personally, I want to be able to buy a ticket that includes nothing else not absolutely necessary and add on only what I need for a reasonable price. Now barring that, if you didn't see a price drop, it's either because the airlines are price fixing, or because the current cost was just that much. The airlines have all been struggling since the cost of security has gone up with the fear of flying. If they were losing money, up until they started doing this and this just evened out, you can't really blame the airlines. I know there's noone bitching about it, that is also giving away whatever they do for a living for free. (Because if you're that rich, you're not bitching about airline prices.) I'd like to see them charging for carry ons, bringing you a glass of water, being late to the airport, being loud or smelly or fat or bringing a kid who's loud or smelly or fat or kicks my seat. Actually, any kid should be a surcharge. Not having your license and ticket out and ready should be a surcharge. Probably using the bathroom, too, by the minute.
We have to put up with worse crap than this in the UK: our cheapest operator, Ryanair, charges extra for a bunch of things that are certainly *not* optional extras .. like checking in .. and PAYING!
:-O
IIRC: £10 online checkin fee per passenger. £5 each way per passenger "payment fee" (unless use a specific obscure card type). £15-£20 each way per passenger for a measly 15kg of checked baggage. You think *you've* got problems!