Consumers salvage one airline battle

Baggage fees and fuel costs continue to be hot topics in the North American airline business, but consumers won one recent battle when an attempt to raise fares by US$10 was lost, which raised questions of just how much air travelers are willing to pay.
 

Continental and United attempted a fare increase that was later joined by US Airways, Delta and American. Low-cost airlines never went along, however.
 

The other airlines then rolled back the increase on some routes, leading some commentators to say that budget airlines have to agree generally on any efforts to raise overall prices.
 

“It’s unclear whether consumer demand is too weak to absorb more price increases, or whether the recent failed price hikes are merely a pause before fares rise again heading into the peak summer travel season,” said the AP.
 

The airlines admittedly are having to cope with higher fuel prices that could add on another $9 billion in extra expenses, according to an analysis by AirlineFinancials.com Bob Herbst.
 

"It should come as no surprise that the airlines must find ways to increase revenues and/or decrease costs to match these large fuel price increases. Fuel is every airline’s highest expense item and covers more than 30 percent of an airline’s total revenue," Herbst wrote.
 

He predicted air fares will certainly go up.
 

But the airlines also face the issue of carry-on bags.
 

There were 59 million more carry-ons last year than the year before, says the US Transportation Security Administration.
 

So the questions come up of how much it costs to screen these rising numbers of bags and who should pay for it.
 

Security screeners cannot keep up with the deluge, says a report by the US Travel Association. The travel industry trade group says the consequences range from longer security lines to less overall safe conditions for flying.
 

“The more traffic coming through the same system, the less people are able to focus on each specific piece,” said Geoff Freeman, executive vice president of the association. “You have the same number of machines and 50 percent greater traffic coming through them.”
 

TSA spokesman Greg Soule said that the huge increase in the number of bags that needed to be screened had not been matched with more agents or X-ray machines. But he also he told the AP that the quality of inspections had not suffered.
 

The US Congress is weighing in on the debate of who should pay. Senator Mary Landrieu at a congressional hearing asked Home Security Secretary Janet Napolitano whether lawmakers should be looking to the airlines to donate some of the profits for baggage fees for additional security.
 

Napolitano estimated that adding more security staff would cost a quarter of a billion dollars a year. She did not comment further because she said bag fees are not regulated by the TSA.
 

Victoria Day, a spokeswoman for the Air Transport Association, a trade group representing the airlines, said it was “in regular discussions with lawmakers” on these issues.
 

The Department of Homeland Security has proposed an increase to $4, from $2.50, in the passenger security fee, beginning in 2012. That increase would raise $600 million a year, the department estimated.
 

Airlines first started charging for checked bags in 2005. Since then, the controversial charges have become the largest source of flight-related ancillary revenue for the carriers. Only two major airlines, Southwest and JetBlue, still allow free checked bags. Security screeners in their terminals have not reported an increase in carry-on baggage.
 

The US Travel Association recommended that the Transportation Department follow the example of Southwest and JetBlue. That would require the airlines to include one checked bag in the base ticket price. It also suggested that the department enforce the number and size of bags that passengers could carry on the plane.
 

The Airline Transport Association said government involvement in airline pricing “diminishes customer choice and competitive differentiation among carriers.”
 

This new discussion of bag fees comes after months of passenger complaints that new security practices are too intrusive and security checks take too long.
 

By David Wilkening