Airlines Set New ‘Premium’ Charge For Holiday Travel

Posted by: Justin Bachman on September 25

A new $10 surcharge for three popular travel dates this winter could make visiting family more expensive. American Airlines (AMR) imposed a $10 charge on domestic flights for Nov. 29 (the Sunday after Thanksgiving) and on Jan. 2-3, the weekend that many people will be returning home from Christmas and/or New Year’s holiday celebrations. United (UAUA) matched the new charge late Thursday, and on Friday Delta (DAL) and US Airways (LCC) said they would follow.

2nd UPDATE: Southwest (LUV), JetBlue (JBLU), Alaska Airlines (ALK), and AirTran (AAI) have not matched the surcharge; Frontier is studying it. “We are focused on providing our passengers the best value in the sky, not taking advantage of them on some of the busiest travel days of the year,” AirTran spokesman Christopher White said.

3rd UPDATE: Continental (CAL) matched the $10 charge on Sept. 25, after 7 p.m.

“Passengers already pay more to fly on certain days – typically, cheaper airfares are available on Tuesdays, Wednesdays and Saturdays – but American and United have now upped the ante, by determining that certain peak travel days are worth an additional passenger-paid ‘premium,’” Graeme Wallace of fare monitoring firm Farecompare.com said Friday in an e-mail to reporters.

The fee – while potentially annoying to millions of travelers – demonstrates that airlines see much firmer demand this winter as more people plan to travel this year. In 2008, amid government bailouts of the financial system and enormous losses for stocks, airlines were devastated by weak demand and fearful consumers. “Holiday travel periods have always had times of peaks and valleys in customer demand,” American spokesman Tim Smith said in an e-mail.

Typically, airlines’ revenue management systems react to heavy sales around holidays by ratcheting fares higher or by not loading fares from the cheapest fare buckets into reservation systems. That’s why traveling the day before Thanksgiving or on Dec. 24 is almost always far more expensive. The surcharge, however, is different in that it applies to all ticket sales and is not subject to discounts as are fares. “This is just an easy way for them to add a small price without having to mess around a lot with their system,” says Rick Seaney, CEO of Dallas-based Farecompare.com. Airlines followed the same surcharge path in 2008 when they assessed a variety of fuel surcharges to cope with the dramatic increase in crude oil prices, which topped $147 per barrel in July, 2008.