WINSTON-SALEM, North Carolina, Feb. 12, 2013 – Airlines worldwide claimed $36.1 billion in revenue in 2012 from various fees, a roughly 11 percent increase from 2011. But, the fees airlines charge are becoming more complex and less transparent, potentially confusing travelers, a new study suggests.
A study from TravelNerd found that airlines made a total of 52 changes to their fees during the past year. Of those changes, 36 were because of a fee increase while the remaining 16 changes came about because of bundling (or unbundling) fees or redefining fee policies, TravelNerd found.
Airlines are charging more types of fees today than in years past, Alicia Jao, vice president for travel media at NerdWallet.com, said in an interview. At the same time, fee changes “are clearly becoming more complex.”
“This is definitely a more recent trend in the last year, creating less transparency and making it more difficult to compare prices and services,” Jao said. “Prior, airlines were primarily adding more flat fees, such as a phone booking fee.”
Baggage fees have caught the ire of Washington. In 2010, for example, then-U.S. Sen. Jim Webb, D-Va., introduced the “Airline Baggage Transparency and Accountability Act” in response to passengers’ concerns about hidden fees and mishandled baggage.
The legislation went nowhere, and baggage fees overall continue to mean big business for airlines. Domestic airlines charged passengers more than $2.6 billion in baggage fees alone during the first three quarters of 2012, according to numbers from the Bureau of Transportation Statistics (BTS).
“Airline fees are definitely here to stay, and regulation remains elusive,” Jao said. “I think the message for travelers is: ‘Be vigilant.’ Cost comparison will continue to be a challenge. As soon as travelers think they have a handle on the fees (such as with checked baggage fees), the airlines can change their fee policies.”
By comparison, airlines charged more than $1.9 billion in change and cancellation fees during the first three quarters of 2012, statistics from the BTS show.
“I think the study tells us that airlines are actively making changes to their fee policies, mainly increases and particularly in areas that have generated more revenue historically (i.e. baggage fees),” Jao said. “According to the BTS, U.S. baggage fees and ticket change/cancellation fees are not experiencing the same growth today as in years prior.”
“The other notable area for fee changes and increases is seating fees, implying that this might be a focus for the airlines in terms of revenue generation,” Jao said. “There doesn’t appear to be any magic bullet so I anticipated we will continue to see more fee changes and adjustments in the near future.”Todd DeFeo is an award-winning reporter and marketer, but his true passion is seeking out the bizarre roadside attractions, one-of-a-kind roadhouses and unique destinations that make the world worth exploring. He is also editor of The Travel Trolley travel blog. Follow Todd DeFeo on Twitter and Facebook.
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