Delta, AirTran say extra fees are here to stay

Delta Air Lines and AirTran Airways’ new $15 charge for a first checked bag, effective Friday, marks another step in the shift of how passengers pay for air travel.

Although airlines are enjoying lower fuel costs, it doesn’t mean the end of extra fees for travelers. That’s because the airline industry has made fees for everything from seat assignments to checked bags part of a new strategy which appears to be here to stay. Tacking on fees makes it easier to charge passengers more, even if competition makes it difficult to raise fares.

Delta discontinued a program launched in October to charge a $5 to $25 fee for some window, aisle and exit row seats.

Rich Addicks / raddicks@ajc.com

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“For many years, airlines have stuck with one price gets you everything whether you need it or not,” said AirTran chief financial officer Arne Haak at a conference last month. “Really what is happening is an unbundling of the services. … That’s how customers respond. Our customers will spend three hours on the Internet figuring out how to save $8 when they buy an airplane ticket. Then they’re going to come to the airport and spend $20 to buy a soda, a bag of chips, a candy bar and a magazine that they could have bought for half the price.”

For passengers, it means paying more to get full service while paying less for bare-bones service.

“Customers have an option to either purchase higher-fare tickets that include the full range of services offered or can choose to purchase a deeply discounted seat where the costs of some services are unbundled,” said Delta spokesman Kent Landers in a written statement.

AirTran chief executive Bob Fornaro said during a presentation at an investor conference this week that the company’s focus on ancillary revenues “is starting to pay some dividends and will pay huge benefits next year.”

AirTran expects to generate more than $30 million in revenue from selling seat assignments at time of purchase. Its first checked bag fee could generate $50 million to $100 million in revenue, according to Haak.

“I think quite frankly the environment that we’re in we’re really unlikely to roll any of those back,” Fornaro has said.

Delta’s stream of revenue from fees “has been going fairly well,” said Delta president Ed Bastian, during a presentation at an investor conference this week.

Some airlines cited high fuel costs when they added certain fees earlier this year, but “I think that was a convenient excuse,” said Port Washington, N.Y.-based airline consultant Bob Mann.

With checked bag fees, for example, Mann said airlines pay more to handle bags and pay for lost and damaged bags. “If you eliminate all that stuff, you eliminate some of the mechanical systems costs, some of the labor component and a lot of the loss and damage,” he said.

But not all of the new fees have stuck.

When Delta announced it would begin charging $15 to passengers for their first checked bag and $25 for a second checked bag on domestic flights, it also said it would drop a fuel surcharge for frequent flier award tickets and its $3 fee for curbside check-in.

Delta also discontinued a program launched in October to charge a $5 to $25 fee for some window, aisle and exit row seats. Delta pulled back the program after its elite SkyMiles Medallion frequent fliers complained en masse. The airline returned to its original preferred seating system to allow Medallion members to book any preferred seats at booking for free. Merger partner Northwest is retaining its existing Coach Choice program. Delta said it is reviewing introducing a modified program to charge for a choice seat in coach while still offering Medallion members their preferred seats.

Airlines also have pulled back on some of their fuel surcharges tacked onto fares at the time of sale. Delta said it has eliminated many of its surcharges with the changing fuel environment.

But observers say the surcharges are sometimes replaced by an increase in fares.

“Some of the fuel surcharges will quietly become part of the fare - they’ll just be internalized as part of the fare,” Mann said.

DELTA FEES

Delta’s fees for checked bags, including the new $15 first checked bag fee effective Friday for travel booked Nov. 6 or later:

For domestic travel:

• Bag 1 - $15

• Bag 2 - $25

• Bag 3 - $125

• Bags 4-10 - $200 each

For international travel:

• Bags 1 and 2 are free

• Bag 3 - $200

• Bags 4-5 - $350

• Bags 6-10 - $600 each

Overweight bag fees:

• 51-70 pounds - $90 each for domestic travel, $150 for international travel

• 71-100 pounds - $175 each for domestic travel, $300 for international travel

• Over 100 pounds - not accepted

Oversized bag fees:

• Length plus width plus height totals 63-80 inches - $175 each

• Length plus width plus height totals more than 80 inches - not accepted

• Passengers checking a bag that goes over the weight limit and size limit could be charged three times: $15 plus $90 plus $175 = $280, for example.

• First-class and business-class passengers will be exempt from fees for the first three bags up to 70 pounds each, while SkyMiles Medallion members and WorldPerks elite members in coach class will be exempt from fees for the first two checked bags up to 70 pounds each.

AIRTRAN FEES

AirTran’s fees for checked bags, including the new $15 first checked bag fee effective Friday for travel booked Nov. 12 or later:

• Bag 1 - $15

• Bag 2 - $25

• More than 2 bags - $50 each

Overweight bag fees:

• 51-70 pounds - $39

• 71-100 pounds - $79

• Over 100 pounds - not accepted

Oversized bag fees:

• Length plus width plus height totals 62-70 inches - $39

• Length plus width plus height totals 71-80 inches - $79

• Length plus width plus height totals more than 80 inches - not accepted

• Business class travelers on AirTran and the airline’s elite-level frequent fliers will be exempt from the first-checked-bag charge and will continue to be exempt from the second-checked-bag charge.