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Airlines boost fares on some peak days

Wed., Nov. 18, 2009, midnight

Stuggling industry cuts flights, gets creative on generating revenue

DALLAS – Call them surcharges or call them fare increases, but either way it looks like you’ll pay more to travel next spring or summer.

US Airways said Tuesday it will add a 5 percent surcharge to all U.S. flights on or after May 8. Spokeswoman Valerie Wunder says the surcharge will protect the airline in case fuel prices or other costs increase.

Separately, Delta, Northwest and United confirmed that they bumped the surcharge on some busy days next March and April to $30 each way from $20 – and to $50 on the day after the Super Bowl.

Most major U.S. airlines have been losing money this year, and they’re scrambling to add revenue with bag-handling fees and surcharges on heavy travel days.

AirTran Airways is looking inside the cabin for another revenue-generating idea. The Orlando, Fla.-based airline is installing ads on the bottom of seat-back tray tables on all its planes. Passengers have to keep the tray tables in their upright, locked position, during the beginning and end of their flights. That means an unimpeded view of the ads, which AirTran hopes will bring in millions of dollars in new revenue.

Airlines have also been cutting unprofitable flights, which saves money and reduces the supply of seats on America’s jetliners.

“The number of seats they’ve cut is allowing them to do crazy things,” said Tom Parsons, CEO of discount travel site Bestfares.com. “They added bag fees and nobody blinked. They’ve got $150 (itinerary) change fees, and now the surcharges.”

Parsons said consumers should expect higher prices next year, whether they’re called fares or surcharges.

“There were a lot of bargains in 2009, but it looks like that’s not going to happen in 2010,” he said.

It wasn’t clear Tuesday afternoon whether the new, higher surcharges would stick. Airlines often roll back fare increases if competitors don’t match them.

Continental had not matched the moves, spokeswoman Julie King said.

American Airlines spokesman Tim Smith said the surcharges “seem to be all over the map. It’s varying widely by airline and market.”

Smith said American had raised surcharges to $30 for some Florida destinations in the spring, and $50 only for flights leaving Miami, Fort Lauderdale and West Palm Beach on Feb. 8, the day after the Super Bowl in Miami.

The airlines have enacted several broad fare increases this year, as well as $20 surcharges on peak days around Thanksgiving and Christmas.

So what’s the difference between a fare hike and a surcharge?

“As far as we’re concerned, there is none,” said Bill Mosley, a spokesman for the U.S. Transportation Department.

Wunder, the US Airlines spokeswoman, said the 5 percent surcharge beginning next May was designed as a hedge against uncertain costs.

“We take more risk when we take bookings early,” she said. “We don’t know what the environment will be if fuel goes up or our costs go up because of schedule changes.”



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