Posted by: David Kiley on September 19, 2009
Congress is so tied up with health care reform that it has no time to take a new and overdue hard look at the airline industry and its total abuse of the American consumer. Airline fees have run amok. It is part of a runaway scourge—Fee Nation—sapping the U.S. economy.
Today, Businessweek.com has a story on fees becoming a lifeline to the airlines. Lifeline? It’s more like a choke-hold. And it has part of the false economy built around fees charged for no good reason and no additional service or benefit.
Let’s hope that changes in the New Year when Congress reconvenes. Hearings are needed; Big, nasty, hoary hearings where the CEOs of airlines are walked into the Capitol.
The latest: A friend of mine used his frequent-flier points to book a trip from New York to Detroit, which cost him a fat fee to start…just to use the points he had earned. After having to change the time, and checking a bag, what should have been a free ticket in the first place because of the tens of thousands of miles he has logged with this airline, the ticket was $280.00, or more than the price of the ticket I booked last month, without using points, to fly between Detroit and New York.
Not every airline is completely abusing fliers with fees. Southwest and JetBlue, for example, do not charge for the first checked bag, while Delta and United charge $15/$20. Spirit and Delta charge $90 if your checked bag is more than 50 pounds. Delta charges $175 for an over-sized bag or box that is 63-80 linear inches. Delta and United charge an outrageous $150-$250 change fee for tickets.
While the fees vary somewhat airline to airline, there remains a aura of collusion among airlines around fees that soak the consumer/business traveler. And that is the practice that needs to be looked into by Congress.
Airlines have a unique place in the U.S. economy. Keeping America flying is viewed as critical. No question that the airlines have been under great pressure since 9-11. But some entity needs to bring sense and a dram of justice to the absolute abuse of the American consumer.
As I have said before, some extra fees seemed merited when oil went to $140+. That is long over, but the fees remain.
Congress? Well, as we see with health care, it isn’t likely that Congress would have the sense or courage to do what needs to be done.
But the hearings would be a start in the right direction.
As a past blog of mine suggested, the way to bring the airlines into line is to treat them like tobacco companies, but at the sharp end of a czar’s regulatory sword. I suggested auto industry czar Ron Bloom, who did a superb job of forcing automakers to make necessary and logical changes to their basic business model. Among other things, he was responsible for firing GM CEO Rick Wagoner.
United Airlines has been in the blogosphere the last couple of months because of a superb video produced by a musician whose guitar was abused and broken by baggage handlers.
United subsequently offered to compensate the singer for his guitar only after he had cut this video and promised to make more. Having been avoided, ignored and shuffled for months on end, he rejected the offer, having earned back the loss from new opportunities that came his way after posting the video. Good for him.
I would suggest that offering to engage an angry consumer, or blogger, only after their YouTube video becomes a runaway sensation on the Web is not such a great strategy for building brand trust, brand equity or a good business model.