Should We Pity the Airlines?

Fees: Airlines love them, travelers hate them.

Fees, especially baggage fees, have probably saved more than one airline from a close brush with bankruptcy over the past year. Fees also drive up the cost of flying, often inflating the price of a ticket from an attractive, low base fare to a wallet-squeezing nightmare. But, according to the Dallas Morning News, fees aren’t going anywhere. This isn’t the first time we’ve heard it, but now the airlines want us to know why.

“The fact is, the average customer travels at below the cost of providing the service,” says American Airlines executive Will Ris. “We lose money on average as an industry for every single passenger. The irony is the perception is that we’re ripping people off when the reality is we’re giving the service at below costs. That has to end.”

And recently, at least, the numbers bear this out. The International Air Transport Association (IATA) estimates North American carriers will lose $2.6 billion in 2009, and that’s with U.S. carriers bringing in $2.3 billion in the first half of the year. Imagine how bad those losses would be without fees revenue, and the picture grows very, very grim.

So what do we do, give the airlines a big hug? Or maybe just our money? If that’s all, then we’re obviously doing our part. “One way to look at it is: If the customer will pay [a fee] and not attack you for doing it, why wouldn’t it stay?” says aviation consultant Michael Boyd. “It sounds a little bit harsh, but it is true—they’re paying it, and they’re not attacking you.”

But, judging from our own readers, many travelers would prefer paying up in a more straightforward way: Higher fares and fewer, if any, fees. This explains the popularity of airlines like Southwest and JetBlue, which may not always have the cheapest fares but do have the fewest fees.