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."

Comments

Southwest

[SuperKendall]

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?