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Mon September 30, 2013
Airlines Offer New Services — For A Fee
Airlines are introducing a new bevy of fees, but this time passengers might actually like them.
Unlike the first generation of charges which dinged fliers for once-free services like checking a bag, these new fees promise a taste of the good life, or at least a more civil flight.
Extra legroom, early boarding and access to quiet lounges were just the beginning. Airlines are now renting Apple iPads preloaded with movies, selling hot first class meals in coach and letting passengers pay to have an empty seat next to them. Once on the ground, they can skip baggage claim, having their luggage delivered directly to their home or office.
MEGHNA CHAKRABARTI, HOST:
From NPR and WBUR Boston, I'm Meghna Chakrabarti, in for Jeremy Hobson. It's HERE AND NOW.
You already get to pay extra for checked baggage or in-flight meals on most major U.S. airlines, but now there's more. American carriers are introducing a brand-new slate of fees for services which they say will improve the traveling experience while also bringing in more money for the struggling industry.
Heidi Moore is the finance and economics editor at The Guardian, and she joins us now from New York to fill us in. Hi there, Heidi.
HEIDI MOORE: Hi. How are you?
CHAKRABARTI: I'm doing great. So what are some of these new fees that the airlines are offering or impose - slash - imposing on...
MOORE: They are offering them. I think after year of the stick method of offering fees, they've gone now for carrots. So you can buy more legroom, which is fantastic. You can buy the seat next to you to keep it empty, which is, I think, a little self-indulgent if I may editorialize.
MOORE: You can buy first-class meals and have them served in coach, maybe just to add a little bit more class torment to your trip. So all of these are, you know, options that you now have to make the traveling experience feel more pleasant. Before, the assumption was that you would just get the bare minimum, and you would have to pay to make it civilized. And now, you have to pay to make it indulgent, almost debauched, if I may say so.
CHAKRABARTI: So that sounds the key difference. Beforehand, we were asked - we were being asked to pay fees for services that we once received. But these are brand-new slate of services that should enhance the traveling experience. So who are these fees or these opportunities geared towards?
MOORE: Well, primarily, they're geared towards travelers, of course, who have money and who are willing to, you know, pay the extra. The thing is, if you're a middle-class traveler, you've already seen the fees that have eaten into your travel money, right? I mean, you pay $2 for soda on Frontier Airlines, $100 for carry-on fees at Spirit, penalties for, you know, printing out your boarding pass and so on. So these are people who can pay and who feel like it's worth it to make the airline experience a bit more pleasant. But I - my suspicion is that most people will be happy to keep things as barebones as possible; that a plane is basically a bus with wings. And everyone just wants to get on, get off and make quick work of it.
CHAKRABARTI: Indeed. So - but tell me a little bit more about how fees play into the airline industry. I mean, are they actually source of a lot of money?
MOORE: Yeah. They have been huge for the airline industry. Just a few years ago, it was struggling, and that was because it drew about 88 percent of its revenues from airfares alone. And when airlines moved to making airfares only 70 percent of their revenues and getting the rest from these fees, they became profitable. They added $27 billion to their revenues just last year from these extra fees and, you know, and that's a 20 percent rise. So as far as money goes, they are on to something very smart. People are willing to pay these fees.
CHAKRABARTI: OK. So let me ask you, am I going to see you on a plane with an empty feet next to you, in a baby-free zone, eating first-class meals any time soon?
MOORE: I would tweet the entire experience, but I doubt that would be me. I do believe in no-frills air travel. I want to get from one place to another and spend my time sunbathing wherever I land.
CHAKRABARTI: OK. Well, one last thing. I see that airlines are collecting data to target where passengers are in airports and then they can offer them nearby services there. In the last couple of seconds that we have, how's that going over with travelers?
MOORE: That will probably go over great. Anything that makes air travel more convenient is probably going to be a hit even it involves some - forsaking some privacy.
CHAKRABARTI: Well, Heidi is the finance and economics editor at The Guardian. Thanks so much, Heidi.
MOORE: Thank you.
CHAKRABARTI: Well, listeners, let us know what you think. Would you like to have that free seat next to you? Would you like to seat in a baby-free zone? And would you pay for it? What kind of fees do you think would make traveling more pleasurable for you? Let us know at hereandnow.org. Well, still to come, Obamacare 101 and, yes, there will be a test. Back in one minute. HERE AND NOW. Transcript provided by NPR, Copyright NPR.