I Know You Need The Revenue, But This Isn’t A Good Idea…
We all know that the airline industry has tremendous challenges. With the rising fuel costs issue (anyone see an end in sight?) being dealt with every day, airlines are looking for additional revenue streams to stay afloat.
In the past few years airlines have charged for lots of different things. Have any really made a huge difference? Not sure, but last week’s announcement that American Airlines is charging $15.00 for every bag you check is concerning from where I sit. Before I expand on my thoughts, let me say that I like the airline a lot and have exceeded one million miles with them earlier this year.
Here are a few thoughts:
- In the past few years, customers have gone from increasing their carry-on luggage to decreasing what they bring on the plane because of the liquid restrictions and now EVERYONE will race to bring whatever they can carry on the plane not to be charged the $15.00. When that happens isn’t it a race to get on the plane first and what happens when you have a connecting flight and you show up a few minutes late and now because your flight may have been delayed, you walk on the plane and now have to check your luggage for the cool price of $15.00? How upset are people going to be?
- Since we are charged $2.00 at the airport now at DFW, I assume the new fee is $17.00 with the original $2.00 going to the airport. I would love someone to clarify this to see if I am right.
- I flew earlier in the week and discussed this issue with two different flight attendants. I asked them what happens when the last eight people show up on the plane with luggage that now has to be checked. Their response (consistent with each other) was that they will pull out a credit card system and charge you right there!
- How long will that take?
- Won’t that create more delays?
- What happens when you lose my bag? Do I get a refund?
- Are more people going to "stiff" the folks that help you at curbside check in?
Yes this bothers me for a few reasons and one has nothing to do with MONEY. If you have platinum or gold status you won’t be charged a thing. So in reality I won’t be charged. However this decision will create more issues with other passengers and ultimately create delays and frankly make the job of the flight attendant harder each and every day and possibly put all of the porters at the airport out of business.
I am not sure who came up with this recommendation at American Airlines. Maybe it was the Chief Strategy Officer or Chief Revenue Officer. Regardless…from where I sit they have missed the boat on this one.
- What do you think?
- What should they have done?
- Will other airlines begin charging as well?
I look forward to hearing your thoughts.
June 4th, 2008 at 8:53 am
You would think that they would charge for carry-ons. That’s what most business consumers (frequent fliers) want and would be willing to pay for.
American can charge me the $15/bag, as long as they refund me $30 for every flight that is not on time. I’m willing to gamble, I would bet that American is not.
June 4th, 2008 at 8:56 am
First off I am no fan of the airlines, mainly from a customer service standpoint I think they really do not care. But I also know that with fuel prices continually on the rise they are in a tight spot. The reason Southwest Air was one of the few airlines to do well after 9-11 was because they had hedged heavily prior to that and bought a ton of cheap fuel…allowing them to weather the post 9-11 world better than most airlines. But back to the question of AA charging for the first checked in bag. Obviously they are looking for new revenue streams and sometimes they just can’t raise ticket prices. Think about it. They raise fairs and all of a sudden Orbitz, Travelocity and all the other online sites now put these fairs at the bottom of the search list, because they are a higher price. So they look at baggage as a way to raise revenue. Do I think charging for the first checked bag is a good PR move? No, it’s not. But do I understand it, yeah I kind of do. And back to my original point…if they would just improve on their customer service I could forgive an increase in the cost of flying a bit more.
June 4th, 2008 at 8:57 am
I too have a problem with the first bag check costing money. I don’t understand why American didn’t follow United and the others with the second bag checked costing money. I think you are right — everyone is going to want to carry their bags on. If they are going to charge the Group “5 or 6″ passengers because they are last on the plane then they better check groups 1-4 and make sure they only bring on 2 items — lately I have seen many people with 3 and 4 carry on bags. Also, the groups 1-4 should put their luggage in their locations and not up front where groups 5 or 6 sit. It is going to be interesting and frustrating for the regular customer - not so much for the business customer because they are gold, platinum or executive platinum.
June 4th, 2008 at 9:09 am
Susan
Interesting thought. My sense is they will charge for carry ons as well. Maybe not in a few months but down the road. I would take that gamble as well but airlines won’t
Thanks for your commnets
Merrill
June 4th, 2008 at 10:11 am
The solution seems simple to me: raise the cost of the flight $15 and no one will know the difference.
On the carry-ons, one of my pet peeves is people who fill up the overhead space on rows where they aren’t sitting. The space above the seats on a given row are for the people sitting in that row. If they aren’t using it, I have no problem with people from other rows putting things there. But the people in the seats should have precedence.
June 4th, 2008 at 10:30 am
Bob
Appreciate the comments. One of the things I am REALLY worried about is someone boarding the plane first is sitting in row 20 puts their bag in row 14 and the person in row 14 sees that the bins are full and actually takes someone elses bag out of the bin and tosses it in the aisle to avoid the 15 charge. Their response is this is my sit and my baggage area. Seems like this is a huge mess waiting to explode
Merrill
June 9th, 2008 at 11:06 am
Great subject, Merrill. I actually thought it was somewhat industrious for Airlines to start charging for Aisle or Window preference, since those who want those seats will pay the difference, PLUS it’s a minimum of two-thirds the entire plane - on any type of plane. I had to respect that strategy, even though I feel bad for the affect it will have on families traveling together, who may not care about where they sit, but now have no choice but to pay those surcharges (are they each going to take a middle seat in consecutive rows? - doubtful).
However, the baggage thing has been upsetting me for a while, and this is close to the icing on the cake. I recently traveled with the family, and as you know, each passenger is allowed 2 bags. So there I am, myself, my wife Janis, and our 4-yr old Maya, and we check our bags. 3 bags among the 3 of us. Then, the curbside guy tells me he needs to surcharge me for one of my bags, due to the weight. No consideration given to the fact that (A) the other two bags I am checking are WELL below the maximum weight requirement, and (B) I could have checked three other bags! And did I tell you the overage was 2 pounds?
So now they want to charge for baggage. Like almost everything else in the airline industry, I guess we just have to take it - for now. Although I’m curious as to the uprising that might ensue in future months, similar to some of the demonstrations and lobbying that has taken place regarding the Airline Passenger’s Bill of Rights, that was all the hype a few months back. It wouldn’t be the first time that a bad business decision was made, realized, and then changed. However, I have personally found that unless I’m flying business or First Class on American Airlines, I’ve been treated like a second-class citizen, so this certainly isn’t surprising, nor is the fact that I now try to fly JetBlue as often as possible, even if I can get a less expensive flight on another airline.
June 9th, 2008 at 11:14 am
Watching my flights to and from NYC last week, I continue to be amazed at the volume of stuff (said politely) people are carrying on. It is incredible. Typically, there is a over-sized rolling carry-on, plus a huge backpack at least as large as the carry-on and a huge purse or briefcase, not to mention the often-seen “shopping bag.” I see no effort being made to tell these people they need to check something. I watched on several recent flights a similar scenario to the one Bob describing with people putting bags several rows away from where they were sitting, even moving other people’s bags to make theirs fit. I saw some pretty rude behavior and one woman who made the attendant go search for her backpack over and over again because she couldn’t recall where she had put and wanted it mid-flight.
The carry-on mess has been out of control for some time and will only get worse. I do my part. I carry on my briefcase and my small purse, and check my bag for trips longer than 2 days. In my opinion, it’s the over-sized bags that are being carried on that cause the most problem, but there is no effort being made to stop it.
As for the $15/bag charge, let’s be serious. The amount of weight people are bringing is just shifting from checked to carry-on. So if added weight is the argument for the money, it just doesn’t fly. I don’t think this is just a revenue generator, it’s a deterrent designed to allow the airline to cut staff levels even further.
If I’m a regular passenger, I already have to check myself in at a kiosk, there’s no food on the plane, and now it sounds like they want me to schlep all my crap through the airport and still risk a $15 charge for my bag at the gate.
The Southwest ad is pretty much on target. If you haven’t seen that ad, it is funny, but we all may soon be charged to use the lavatory!
June 9th, 2008 at 11:26 am
Lance,
Two pounds over - amazing! The guy should have just said since you are two pounds over and I am sure you dont want to be charged why don’t you move a few things to your other bags.
Merrill
June 9th, 2008 at 11:28 am
Lynn,
I saw the Southwest ad last night and actually laughed out loud. When they were charging .25 for the tray table I almost lost it! Very clever and frankly almost true.
Go Southwest go!
Merrill
June 9th, 2008 at 12:19 pm
Look what one hotel chain is doing about it!!
BAGGED!
When the airlines began charging $25 for a second checked bag, it met with only mild resistance. Then American Airlines pushed even further. The airline announced it would charge $15 for a traveler’s first checked bag. With other airlines likely to follow suit, Loews Hotels announced a “Baggage Buy Back” incentive. The chain’s properties will reimburse guests $15 dollars for the fee.
To redeem the “reimbursement” guests must present an airline bag fee receipt at the front desk. A rebate will be received in the form of credit on the bill at checkout. There is a two-bag limit per occupied room.
“We want to demonstrate to our guests how much we appreciate their business,” says Loews Hotels chairman and CEO Jonathan Tisch. “One way we can do this is by helping them rein in some of the hidden costs of travel that are becoming increasingly common.” The Baggage Buy Back rebate will be available at Loews’ 18 properties from June 15 through September 1.
June 9th, 2008 at 12:54 pm
On the other hand, reducing domestic capacity and raising costs due to jet fuel spinning out of control may cut the number of passengers down enough that the heavy carry-on leisure travelers will have to consider alternate ways to travel, or cut back on travel altogether. The charge is horrific but given that the bottom line for less-perferred travelers is minimal cost, minimal effort, and maximum profitability, not surprising.
There is a bright side: less checked baggage may mean less lost luggage. Especially in the holiday season: we once had an international trip ruined because American Eagle arbitrarily unloaded bags from a Chicago to JFK flight to make a packed plane lighter (including our two garment bags). One bag took a week to reach us at our final destination, and the other vanished into a Heathrow labor strike, never to return. It took two months and $600 of int’l cellphone calls to get reimbursed.
The bottom line: travel light or ship ahead with a trackable carrier. Meanwhile, I’m looking forward to the day when international carriers with a different attitude about customer service can handle certain domestic routes as part of their network. With deregulation, it’s coming. I can’t see Congress getting protectionist about an industry that’s rivaling cable TV for minimal customer satisfaction.
June 9th, 2008 at 1:11 pm
Ken,
I actually like the idea! I am sure Loews Hotels will get some new customers and solid PR.
Thanks for sharing.
Merrill
June 9th, 2008 at 1:14 pm
Stuart,
Interesting comments. We had our bag lost on our way to a wedding recently and it was very painful to get any solid information from American Airlines. We kept getting the run around, inconsistent information and finally got $100.00. Of course we spent almost $300.00 for things we needed for the wedding.
What a pain - and unfortunately I don’t think they really care.
Merrill
June 9th, 2008 at 3:22 pm
I bought a digital luggage scale for my wife I saw advertised in Sport Diver Magazine and she loves it. Check it out at this website: http://www.balanzza.com/
June 9th, 2008 at 3:34 pm
Rick,
Thats a great idea - thanks.
Merrill
July 1st, 2008 at 7:56 am
I am on a plane three to six times a month for business and am finding the baggage charges to be causing delays each and every time as passengers try to cram all their bags on to the plane so they do not have to pay the fees. This has the flight attendants scrambling and arguing with passengers as the last twenty people or so will find that they have no overhead compartment space to place their bags in.
I understand that the price of jet fuel is causing the airlines to make major changes to stay afloat. They should build the baggage charges into the cost of the tickets as the delays have to be costing them money. On my recent trip from Boston to Los Angeles we had to circle LAX for about fifteen minutes because we took off from Boston so late we missed our sequencing with air traffic control. Did the revenue they made from charging for the bags and causing us to take off late make up for the fuel they burned circling the airport because of it?
Business travel was never fun but it is becoming less fun as the airline industry adapts to these rising fuel costs.
July 1st, 2008 at 10:07 am
Andrew,
Appreciate the comments but the story doesn’t surprise me at all. I believe travel starting in September will be a real pain with tons of delays….. Actually I take that back - the airlines will make the flights longer to cover up for the delays…..
You are right - what a pain and not fun at all.
Happy travels.
Merrill