The airlines are in the process of rebundling fees that they just unbundled. After removing everything associated with service from their basic airfares, airlines are now allowing consumers to get bargains on fees by buying them in bundles. Airlines have bundled fees to allow consumers to avoid fees that the airlines created themselves.
Of course, even with their new fees, the airlines are refusing to tell travel agents their fees or allow passengers to compare prices of flights, inclusive of fees, across airlines. It is a game of make the purchase as difficult and confusing as possible.
Let’s look at American Airlines’ new fee structure.
The new system will give passengers the option to stick with the lowest fare available, called Choice, and pay a la carte for checked bags, preferred seating and other services and perks. For an additional $68 round-trip, a new Choice Essential option includes one checked bag, no change fees and priority boarding.
For $88, Choice Plus includes those three items, plus a 50 percent AA Advantage mileage bonus, same-day flight change or standby and a premium beverage.
What have we here? AA is selling for $68 their first-checked-bag fee (normally $25 each way), the early boarding (normally $9 each way) plus a form of insurance against being charged a change fee should one decide to change their flights (however, any change in airfare still applies). That means passengers who pay for their bag and early boarding fee would not have to pay a $150 change fee.
The $88 Choice Plus fee clients get all of the above plus they receive a 50 percent frequent flier mileage bonus (on a flight from Boston that means about $17-$20 worth of mileage), free drink, free same-day standby privileges or same-day flight change without a change fee.
All in all when comparing AA basic airfare, the new bundles provide some good incentives and far more flexibility. On a February 21st flight from Boston to LAX, the basic round-trip airfare is $318. Choice Essential costs $386 (with early boarding and one checked bag); Choice Plus costs $406 (with the benefits noted in the paragraph above).
With the free drink, flexibility and the mileage bonus, this is a bargain.
United can match AA’s airfares, but they fall short when passengers want to check bags and get early boarding because of the add-ons offered by AA. Neither Southwest or Delta offer any non-stop flights, so they fall by the wayside.
It looks like AA has a winner. For those passengers who commit to checking a bag and purchasing advanced boarding, AA will provide extras that make considering the additional $68 or $88 worthwhile.
Delta has also created a different bundled fee structure.
Atlanta-based Delta Air Lines in 2012 quietly launched two bundle options — a “Lift” package for $34 that offers priority boarding and an extra 1,000 frequent flier miles, and an “Ascend” package for $19 that includes priority boarding and a 24-hour wi-fi pass.
While American sweetens the bundle with a free drink, mileage bonus and a break on change fees, Delta simply offers a $4 discount over what purchasing these fees individually will cost a la carte.
Here’s the rub. Airlines are working hard to make basic airfares as difficult to compare across airlines as possible. Already, airlines offer fares similar to those noted above for their elite frequent fliers and customers using airline credit cards, but the complexity of airfares and ancillary fees serve to make comparison shopping virtually impossible.
The Consumer Travel Alliance is still speaking with the Department of Transportation about mandating that airlines at least make their basic airfares, including baggage fees and seat reservations, comparable across airlines. They can add every kind of bundle they want to the mix. However, consumers should have the ability to comparison shop for basic airline tickets with baggage charges and seat-reservation fees.
Certainly, American Airlines would want to be able to showcase how their Choice bundles could save money over similar offerings from competitors. And, Delta would like to highlight its bargain airfares.
Why do these airlines make it so difficult for consumers to compare prices and so difficult for themselves to differentiate themselves from each other if, in fact, they offer unique and different services?
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
