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Airlines Offering More Perks—For A Fee

Airlines Offering More Perks—For A Fee

Air travelers have become accustomed to paying extra fees for everything from checked bags to changed reservations.  But many airlines are now introducing fees that may actually be popular with travelers. These new optional fees are for things that enhance the flying experience, like extra legroom, hot first class meals, or even pre-loaded iPads for the flight.  "Airlines will invent a fee for anything they think they can get away with," says Bob Harrell of Harrell and Associates, an airline consulting firm.  "These new fees are much more digestible by the passenger because it's a perk," Harrell tells KTRH.  "It's getting an empty seat next to you or a meal from first class--most people would like to pay for something like that."

People are apparently paying for these perks, as the airlines are cleaning up from added fees.  Fees bring in an estimated $15 billion a year for the airline industry, and are the primary driver behind the increased profits most airlines are seeing.  Harrell explains that it's easier for airlines to make money off of fees than the actual airfares, which are subject to more competition and scrutiny.  "The thing about fees that airlines like, particularly these new fees, is they tend to be more invisible," he says.  "They're not gonna be as noticed as a general five or ten-dollar across-the-board increase."

Among the newest "upgrade" offerings, Southwest Airlines offers a move to the front of the boarding line for $40, and American Airlines offers a $68 roundtrip upgrade that includes early boarding, one checked bag and no change fees.  With this new wave of fee services, the airline industry may have finally found the right balance between giving customers what they want and increasing its bottom line.  "Getting your bags sent to the hotel for 30 bucks, or getting a first class meal if you're hungry and don't want to take the economy sandwich," says Harrell.  "They're definitely going to appeal to passengers." 



 

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