honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, December 24, 2008

Baggage fees not going away even with oil prices sagging

By Harry R. Webe
Associated Press

Hawaii news photo - The Honolulu Advertiser

Baggage fees were added to air travel to offset the high price of oil, but though oil prices have since plummeted, the fees are sticking. One reason: Airlines still are losing money in the bad economy.

ASSOCIATED PRESS FILE PHOTO | September 2008

spacer spacer

HAWAI'I CARRIERS STICK WITH POLICIES

In Hawai'i, interisland carriers charge a variety of luggage fees and haven't dropped any of those new fees since fuel prices plunged.

Since August, passengers traveling interisland on go! have been charged $10 for the first checked bag and $17 for the second.

For travel to the Mainland and other destinations, Hawaiian Airlines has charged $15 for the first checked bag since August and $25 for a second checked piece of luggage.

For interisland travel, Hawaiian charges nothing for the first checked bag and $17 each way for a second checked bag.

Mokulele Airlines allows for two pieces of checked luggage for free on interisland flights up to 50 pounds. From 51 to 70 pounds, the airline charges $25 more.

Island Air allows one free checked bag up to 50 pounds.

Most airlines add another fee for additional, oversized or overweight luggage.

— Robbie Dingeman

spacer spacer

ATLANTA — When airlines started charging some passengers $15 or more earlier this year to check their bags, they blamed soaring fuel costs. Since then, oil has plummeted. Yet the industry hasn't stowed away the bag fees.

Many of us are still paying to fly with a suitcase that doesn't squeeze into the overhead bin or under the seat.

The reason is simple: Airlines are still losing money, though now largely because of the recession instead of oil.

And don't expect the fee to disappear even when the economy rebounds. Airlines are finding the fees to be a reliable source of revenue and say that such charges allow passengers to choose only the services they want.

Passengers, meanwhile, are paying up and grumbling. Many are being socked, on average, $15 for the first bag and $25 for the second.

"I think it's unfair and I think it's highway robbery," said Benjamin Johnson, a 38-year-old government employee, as he headed from Atlanta to Orlando, Fla.

For the airlines, the bag fees, on top of charges for other once-free amenities, add up to much-needed revenue. The industry is expected to lose $4 billion for 2008, excluding one-time items, despite the plunge in the price of a barrel of oil from $147 in July to around $40 this week, said Calyon Securities airline analyst Ray Neidl.

Airlines now say they are being hurt by the recession, which has caused demand for seats to drop. The International Air Transport Association said global passenger traffic declined 1.3 percent in October from a year earlier.

Airlines also have been weighed down by bad bets they made on the price of fuel when it was skyrocketing. After locking in at prices that looked reasonable earlier this year, some are paying substantially more than market price for a portion of their fuel.

Airlines do not break out the revenue brought in by baggage fees.

"While fuel prices have fallen, the economy has created a new uncertainty for us, and the industry's going to lose billions of dollars this year," said Doug Parker, chief of US Airways Group Inc. "Indeed, it was fuel-driven economic concerns, but now we have different economic concerns. And having said that, I, for one at least, believe it's the right model for the business, irrespective of what environment we're in."

Airlines say the fees are a new way of doing business in which services that were once bundled into the price of a ticket are offered a la carte.

An October poll of frequent travelers found that half prefer a lower ticket price in exchange for a la carte pricing for food, beverages, headphones and blankets. But the same survey, conducted for IBM, found that 82 percent described the baggage fees as a "rip-off." By comparison, only 45 percent viewed food and nonalcoholic drinks that way.

After getting off a recent flight to Atlanta, insurance sales representative Cecilia Kolstad said it was crazy she had to fork over extra money to check a bag.

But "if it's between that and seeing an airline go out of business I guess I'll pay the $15 because I like to fly," said Kolstad, 55, of Pembroke Pines, Fla.

Some travelers bypass the fees by packing lighter.