Airlines may add fees to offset fuel costs, experts say
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Jan. 03 -- TAMPA -- Airlines brooding over expectations that fuel prices will escalate this year may adopt more fees to boost revenue, financial analysts and industry observers agree.
Among the possibilities: a fee for paying with a credit card, for making a reservation over the Internet, or for not using the Internet or a kiosk to get a seat assignment.
"Airlines don't want to go back in the red," said George Hobica, founder of Airfare watchdog.com, the latest to predict additional costs for travelers. "We could see a number of new fees."
Continental Airlines last month inaugurated an optional "FareLock" fee that allows a passenger to hold an airfare for three or seven days, at fees from $5 to $9.
That allows a passenger to shop around or change plans without fearing a $150 ticket rebooking fee, although Continental and Delta Air Lines offer free rebooking within 24 hours of making a reservation.
Hobica said as many as 10 new fees could become more widespread this year. Some are already in use by European carriers and a handful of U.S. airlines.
Hobica believes fees U.S. airlines might consider include checked bag fees by the pound, fees to change a name on an airline ticket to reassign it to someone else, carry-on bag fees, fees for infants not holding a ticket, and the Continental concept for a fee to lock in a fare at price before making a commitment to buy the ticket.
U.S. travelers would recognize some of those fees that a few domestic carriers implement today.
-- Allegiant Air, the dominant carrier at St. Petersburg-Clearwater International Airport, charges $14.99 for booking a reservation through an Allegiant call center, rather than buying a ticket at the ticket counter.
-- Spirit Airlines, which flies from Tampa International Airport, charges from $20 to $45 for carry-on items that must be loaded in overhead bins rather than fit beneath the seat.
Spirit got 26.9 percent of its revenue from ancillary fees in the second quarter of 2010, from April through June, while Allegiant got 9.7 percent, U.S. Department of Transportation reports show.
Airlines through Sept. 30 made $4.3 billion in reservations cancellation or change fees and baggage fees.
Southwest Airlines, which does not charge for the first two checked bags, nor for reservation changes, picked up 6.7 percent from fees, such as $10 for an "Early Bird" boarding fees that gets passengers on board early to get first crack at Southwest's unreserved seats.
In addition to the possibility of fee increases, airlines are expected to increase air fares, though not by as much as some might fear.
"It's impossible to speculate how much air fares got rise this year," Hobica said. "But it's likely that's the January-February period will be the best chance to take advantage of air fare sales, much better than in March and April."