Business | Aviation

Biggest airlines could pocket $36.1b in 2012

Airlines must get creative as they charge for almost every extra service offered

  • By Hugo Martin
  • Published: 14:48 November 6, 2012
  • Gulf News

Los Angeles: The amount airlines are pocketing on passenger fees continues to rise, prompting the question: What new fees can carriers think up?

The world’s biggest airlines are expected to collect $36.1 billion (Dh132.7 billion) in passenger fees in 2012 — including charges to check bags, buy food and drinks, and use on board wireless internet — according to a study released last week by IdeaWorksCompany, a Wisconsin consultant on airline revenues, and Amadeus, a travel technology firm in Madrid.

The latest total represents an 11.3 per cent increase from the $32.5-billion estimate for 2011, according to the study. One reason for the increase, the author of the report said, is that airlines and online travel agents have made it easier to pay for such extra charges at the time you book your flight on the web, instead of waiting until you get to the airport or to your seat to pay.

The travel website Orbitz, for example, offers a deal that lets you pay an extra $50 when you book your flight online, entitling you to check two bags at no extra charge and sit in a roomier seat near the front of the plane.

“They are understanding how to raise and lower fees to maximize overall revenue and how to better position items in the booking path to drive better sales,” said Jay Sorensen, president of IdeaWorksCompany.

What new fees can you expect in the future? Joe Brancatelli, who writes a weekly travel column for the business travel website JoeSentMe, said airline executives must get creative because they already have adopted charges for almost every extra service offered. “The low-hanging fruit is gone,” Brancatelli said. “They are going to have to invent products.” Among other charges airlines will push harder to get you to pay for, he predicts, are extras such as luggage delivery services, travel insurance in case you need to rebook a flight, higher fees for faster onboard Wi-Fi, and hotel and car rental package deals. “Airlines are looking for anything they can do to raise revenue,” Brancatelli said. Sandy stranded many at low-rated airports Sandy, the monster storm that put a freeze on the nation’s busiest airspace, stranded fliers across the country, especially in flood-damaged East Coast airports.

Unfortunately, many of those marooned travellers were stuck in airports with lousy reputations for food, comfort and entertainment. In fact, the least desirable airports to be stuck in include Dulles International outside Washington, Hartfield-Jackson Atlanta International and New York’s John F Kennedy International, according to a new online survey by MissTravel, a dating website for frequent travellers.

The website surveyed 5,000 of its members, most of whom spend lots of time sitting in airports. MissTravel spokeswoman Jennifer Gwynn said the survey gave Dulles, JFK and Hartfield-Jackson low marks for being crowded, with long lines for bathrooms and poor selections for food and entertainment. In contrast, the survey concluded that the best airports to be stranded in were Dallas-Fort Worth International, Pittsburgh International, Austin-Bergstrom International in Texas and General Mitchell International in Milwaukee.

The top-ranking airports were cleaner and had more choices for places to shop and eat, Gwynn said. “If you are stuck there, there are lots of things to do,” she said. She noted that the Milwaukee airport even has a ping-pong table, which was installed last summer as part of a special event. It became so popular that the airport made it a permanent fixture.

Meanwhile, those Kiwis at Air New Zealand Ltd are at it again. In the past, they have produced aeroplane-safety videos featuring nude flight attendants, fitness guru Richard Simmons and a plane full of rugby players. Air New Zealand unveiled last week a new video starring the characters - hobbits, wizards, elves, dwarfs and orcs - from the Lord of the Rings movies, which relied on New Zealand for most of the outdoor scenes. The video even includes a quick appearance by the films’ director, Peter Jackson. On the flight to Middle Earth, he vanishes after slipping on the ring of power.

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