An Airline Fee That Exists for No Apparent Reason

https://www.wsj.com/articles/the-airline-fee-that-exists-for-no-apparent-reason-1530104985

by jedwhite • 8 years ago

136 78 8 years ago

wsj.com

jiveturkey• 8 years ago

https://outline.com/dWqwhr

WalterGR• 8 years ago

^ Blind link goes to a non-paywalled version of the article.

missblit• 8 years ago

Is it just me or does outline.com not work at all half the time in any browser besides Chrome because it checks for the nonstandard `window.chrome` property?

tscs37• 8 years ago

Works in Firefox 60 for me.

neonate• 8 years ago

Also http://archive.is/VXlgz

deanCommie• 8 years ago

Another workaround. i have a bookmarklet that does this for my current tab:

javascript:(function() {window.location='https://l.facebook.com/l.php?u=' + window.location.toString() + '%3Faction%3Dclick&h=ATMNXkm4NSmFwOsi-Haa_NbgSEZnRVHr0vNHn0MvV2qg4opxZrHpocUPwdIbENnkrOQTGl2R2Plu0P0127qT_jjdApVkgJUiofc48hvHRlNKuw';})()

Basically redirects through Facebook, and WSJ doesn't paywall you then.

ernsheong• 8 years ago

https://app.pagedash.com/p/91ed545f-cf57-4bc7-b485-9428b11b9...

timcederman3• 8 years ago

I recently priced up tickets from San Franisco to Sydney, and it was more than double the cost of Sydney to San Francisco. In fact, I priced up dates that included my original itinerary, and it was cheaper to buy two tickets originating in Australia.

thaumasiotes• 8 years ago

As far as I know, It's hard to arbitrage this because the 21st-century tightening of airline "security" means you'll be rejected from a later leg of your flight if you weren't on an earlier leg. Have you tried actually booking the two trips out of Australia and only taking the last half (Sf -> Sydney) of the first one?

timcederman3• 8 years ago

It's impossible to do, I was just making sure it wasn't a quirk for the dates I was looking at.

wahern• 8 years ago

IIRC airlines were already prohibiting that before 9/11. Security is just a convenient excuse.

Similarly, once upon a time you could arrive at the airport 5 minutes before the flight, frantically check-in at the counter[1], and race to your gate while the check-in counter phoned the gate to ask them to hold the door (at the pilots discretion). That kind of stuff causes delays and the airlines were already putting policies in place to stop that before 9/11. If you arrive late today they'll simply tell you that you missed the 30 minute window imposed by the TSA to ensure proper inspection procedures, but in the absence of the TSA rules the same policy would almost certainly have existed anyhow. Market competition forced airlines to more efficiently manage gate resources, and random passengers boarding at the last minute can be extremely costly.

[1] I forgot to add: check-in baggage might either be sent through the system (urgently) or you might check it in at the gate. These days I think you can still arrive inside the 30 minute window if you don't have any check-in baggage, but don't expect any courtesies.

karthikb• 8 years ago

Value based pricing. More willingness to pay for ex-US fares than from anywhere else in the world.

useful• 8 years ago

It's not value, airlines price on yield.

kenneth• 8 years ago

This isn't related to the carrier-imposed surcharges, however. Airfare is priced according to a system of filed fares with specific rules, for specific city pairs, that require booking into specific "inventory."

Internationally, round-trips and different fares than one-ways. And SFO-SYD is a different fare altogether from SYD-SFO.

A fare might say:

    - Originates in SFO, destination SYD
    - Books into economy class
    - Requires S-code inventory
    - Requires a round-trip
    - Can be combined on a half-round-trip basis with any other fare USA-Australia fare (e.g. you could combine two fares SFO-SYD and NYC-MEL to get a SFO-SYD/NYC-MEL round trip)
    - Can use any flights that have S-code inventory
    - Except no stopovers
    - And only 1 transfers in Area 1 (USA)
    - Can be reissued for 400 USD

With that fare, you can then build an itinerary from segments (flights) that match all requirements of the fare.

timcederman3• 8 years ago

How is this different to the first example in the article?

They aren’t tied to distance traveled—fees are often the same for flights from Europe to New York and Los Angeles. They vary wildly by direction of travel. Business-class tickets on British Airways between New York and London have a $1,006 carrier-imposed charge if the round-trip begins in New York, but only $381 if the round trip originates in London.

theoh• 8 years ago

Pasting blockquote, sigh.

- Originates in SFO, destination SYD - Books into economy class - Requires S-code inventory - Requires a round-trip - Can be combined on a half-round-trip basis with any other fare USA-Australia fare (e.g. you could combine two fares SFO-SYD and NYC-MEL to get a SFO-SYD/NYC-MEL round trip) - Can use any flights that have S-code inventory - Except no stopovers - And only 1 transfers in Area 1 (USA) - Can be reissued for 400 USD

megy• 8 years ago

Airlines charge a maximum of what people will pay, or try to, and still fill the seats.

namdnay2• 8 years ago

The best example of this is BA pricing for business flights departing going through LHR. E.g. FRA-LHR-DFW is very competitively priced (to undercut LH) - on average 2800E return, however the exact same LHR-DFW return flight is nearly twice the price!

imgabe3• 8 years ago

And it doesn’t impact how many frequent-flier miles you collect for a flight on an airline that pays out miles by price instead of distance.

Not true exactly, at least on American. I fly them almost exclusively and I just went to check this out. To move up to the next tier of status in their frequent flier program, you need to spend a certain amount of "Elite Qualifying Dollars" (or EQD) every year. The EQD are based only on the fare price, exclusive of taxes and fees.

So, this would allow them to control how many people are moving up to the different status levels, by adjusting the fees vs. fares for each ticket.

ubernostrum4• 8 years ago

Whether or not you've hit your EQD threshold affects whether you achieve a status level. It doesn't directly affect your mileage earning rate (your status level can affect that, but isn't relevant to what the article is stating).

So the article is correct: these fees do not change the mileage you earn from buying the ticket and taking the flight.

imgabe3• 8 years ago

Right, it doesn't change the mileage you receive, but you need both miles (or segments) and EQD to reach the next status level.

pmcginn• 8 years ago

That's not true--this article is about airline fees, not government fees, and AA counts airline fees when they calculate EQD's. From AA.com:

"EQDs are awarded based on ticket price (includes base fare plus carrier-imposed fees, but excludes government-imposed taxes and fees)"

imgabe3• 8 years ago

When I look at the receipt from my ticket I see:

    FARE-USD 	$ 440. 	93
    TAXES AND CARRIER-IMPOSED FEES 	$ 61.67
    TICKET TOTAL 	$ 502. 	60

Then when I go to the account summary and see the EQD awarded from that trip, it's 440, which is only the amount of the fare. Maybe it was only taxes on that ticket and no carrier fees though.

cpncrunch• 8 years ago

In Canada the airlines have to advertise total price. They can show a breakdown of taxes and fees, but the main advertised price must be the total price the customer pays.

advisedwang• 8 years ago

As the article states, the issues isn't that customers don't see the fares when searching for prices, but that loyalty programs and some corporate discounts exclude fees. So this practice gouges them.

nradov• 8 years ago

Corporate travel managers aren't naive about this stuff. They know what they're getting when they negotiate a discount for employee travel.

josephh• 8 years ago

And that's no different in Canada. I remember having to pay over $800 in surcharge and fees for redeeming a round trip flight via Aeroplan

GalacticDomin8r• 8 years ago

A good policy probably, but getting "a breakdown of taxes and fees" is easy in US as well. That is assuming you accept the definition of a breakdown as:

Fees: X Taxes: Y

And that's it. So it doesn't seem that policy would help much regarding the point of this article.

coldcode• 8 years ago

When I worked for a travel company I saw a lot of fares that had lots of taxes and fees on them. Some flights brought fewer dollars to the airline than everyone else. You pay for both airports, the cities/states/provinces/countries they are in and places you go thru airspace to and anyone else who can put in a claim. The most I ever saw was around 12 on a single segment. The final cost of an airline ticket supports a village.

jlarocco• 8 years ago

But that's how everything works. When I buy a gallon of milk at the grocery store, the store gets a cut, the delivery truck driver gets a cut, the gas station he uses gets a tiny cut, the farmer gets a cut, the bottler gets some, etc. Despite all that, the price I see is a single number.

The weird thing with airline tickets is that the airlines break the price out into two pieces and call one the fare and the other a processing fee, as if that distinction makes any difference to anybody but them.

dboreham• 8 years ago

It isn't just airlines. Other industries have discovered this dark pattern (presumably there is a class in "Dr Evil MBA" where they teach it).

E.g look at your phone bill.

jwilliams• 8 years ago

The surcharges often are used against miles-based travel. You book the ticket one miles, but still get hit by various taxes and surcharges. Often it's a large chunk of the total fare.

Qantas has a "fuel surcharge" for a long period during high oil prices. This surcharge was literally to bill you for a base cost of their service. Arguably pure marketing.

yitchelle• 8 years ago

Have Qantas removed the "surcharge" yet? I remember hearing about it in the late 80s, and continue to hear about it through the 90s.

lathiat• 8 years ago

Still high taxes for Qantas rewards redemptions. Majorly so.

ggm• 8 years ago

I wrote to the ACCC about it. I asked what figure per mile flown and per gallon price at hedge was used to calculate the fee. If the fee did not reflect actual mileage flown or exposed cost, I argued it was misleading to call it a fuel surcharge and thus an illegal impost to get round pricing limits. No reply, but a barrackroom lawyer rarely deserves one.

the_watcher• 8 years ago

Those carriers give out miles based on total fare.

Sort of. They give out miles based on this, but often not the miles needed to accrue status (which often makes mileage accrual substantially more lucrative, as well unlocking free/reduced upgrade access). On United, for example, you accrue MileagePlus miles based on total price paid, but accrue "Premier Qualifying Miles" and "Premier Qualifying Dollars" based on the "fare", which is always far lower.

dannyw• 8 years ago

No, PQD includes carrier surcharges. Here’s United:

You earn PQD for the base fare and carrier-imposed surcharges on eligible flights.

Same for American, and probably other carriers too.

jpatokal2• 8 years ago

In "turnabout is fair play", there's a neat technique called "fuel dumping" that makes use of this by finding fares that, for various complicated reasons, don't have the surcharges added, occasionally allowing crazy cheap flights. It's quite complicated though and (surprise!) airlines hate it.

https://www.secretflying.com/posts/fuel-dumping-basics/

craftyguy• 8 years ago

Not really secret if it has a public website that is shared publicly.

jpatokal2• 8 years ago

The technique is public, but actually finding dumpable fares is left as an exercise to the reader.

adrianmonk2• 8 years ago

Perhaps it's "secret" in the sense of tricks known to any expert in a subject.

Much like the secret to more-easily peeled hard-boiled eggs is to put the eggs in cold water before you boil it. Or like baking soda is the secret to shrimp with a firm texture.

gruez• 8 years ago

https://www.secretflying.com/posts/fuel-dumping-basics/
The extra flight added on to the itinerary that causes the fuel dump to occur is called the “strike”. This flight should be short and inexpensive, otherwise it defeats the purpose of this whole practice.

why would adding an extra flight to the itinerary remove/replace the fuel surcharge? surely this must be a bug in their booking system?

wyattpeak• 8 years ago

Unusually for WSJ, I find the title of the article fairly misleading. It seems to imply that there is an extra charge being levied, whereas it's actually talking about a complicated price structure designed to disadvantage frequent fliers and corporate customers.

Still shady, but not obviously implied by the title.

listenallyall3• 8 years ago

While we're at it, might as well complain about hotel "resort fees," which I feel are far more predatory since they are NOT included in the reservation rate you pay online, and are often difficult to find prior to showing up at the hotel. Plus they usually cover things that used to be no-brainers like use of the fitness center and daily newspaper.

I'm surprised the online reservation sites and the host cities haven't fought back against this practice. Booking a $75 room with a $30 resort fee robs the booking site of nearly a third of its commission, and the city of the same proportion of the hotel taxes. (the sales tax charged on the resort fee is not the same as the hotel occupancy taxes charged on the room rate.)

mercyandgrace2• 8 years ago

I was at a bar on the Las Vegas strip not too long ago, and even they had some form of 'resort fee/tax'. I was really taken aback. I'm not sure the legal ramifications but I should have refused to pay.

russtypinn• 8 years ago

Was a band playing? That might have been the live entertainment tax. As a Vegas resident I thank you for helping to pave my roads. /s

https://tax.nv.gov/FAQs/Live_Entertainment_Tax___FAQ%E2%80%9...

listenallyall3• 8 years ago

Most likely a "concession fee." Lively discussion here: https://vitalvegas.com/beware-the-deceptive-cnf-charge-at-be...

reustle2• 8 years ago

On a somewhat similar note, hostels in Scandinavia (at least Norway and Sweden) generally always charge for pillowcase & sheet rental (a few euros), which are mandatory. They also don't allow any external sheets or sleeping bags for hygiene reasons.

tallanvor• 8 years ago

I've never experienced that at any hotel in Norway or Sweden. That sounds more like a charge you would expect in a hostel.

croisillon• 8 years ago

I remember drying after shower with my bedsheet in a hostel in Portugal where I would have had to pay for a towel, those were the times!

AnimalMuppet• 8 years ago

My personal gripe is banks' "inactive account fee". Is my account being inactive costing them any money? Well, no, it's not costing them any more money. It might mean that they don't have opportunity to charge other fees, but what it really seems to be is "if you're not paying attention to this account, we'll start charging you this fee because you won't notice".

jtokoph• 8 years ago

I think it’s the banks way of taking some of the money before it’s legally taken by the state. In many if not all states, if a bank account is inactive for 3-5 years, the state considers it “lost” and takes the money until it’s claimed in the future. So the bank will try to drain as much as possible for themselves before that happens.

Terretta• 8 years ago

It costs money.

Your transactions are tip of the iceberg compared to the mass of regulatory requirements banks have to fulfill for each customer. You can learn about some of that by Googling down the “KYC” (“know your customer”) rabbit hole.

Banks make money on putting deposits to work and on transactions.

To cover costs of having to maintain regulatory compliance regarding account holders, there’s a minimum amount of deposits needed before interest off putting parked money to work pays enough, or minimum number of transactions before transaction fees pay enough.

So, you get minimum deposits requirements, or inactive account fees.

so33• 8 years ago

Slightly off-topic: My "favorite" fee I've encountered is Spirit Airlines' "Unintended Consequences Fee": https://www.cnn.com/2012/02/01/travel/spirit-fee/index.html

aidenn0• 8 years ago

I seem to recall that when the government repealed some telecom tax, Verizon added a surcharge of an equal amount, and pocketed more money without changing the total bill for anyone.

chrisbennet• 8 years ago

I have a fantasy of getting one of these companies as a client and padding my bill using fees like theirs: “federally mandated taxes” (my income taxes), “infrastructure fee” (my computer etc), “e&o insurance” (my errors and omissions insurance), “PP charge” (pure profit fee), etc.

An Airline Fee That Exists for No Apparent Reason

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