You Get What You Pay For
The airfares may be low, but the fees can add up.
From Kiplinger's Personal Finance magazine, January 2009
The battle for survival among airlines is being played out between two major companies, each with a totally different plan. Southwest and American airlines each has a different purpose: Southwest to attract business fliers and hold on to budget travelers, and American to hold on to high-end business fliers while offering low fares to keep budget travelers but hitting them with new fees.
American was first to charge low-fare customers for checking bags. In fact, American charges for all sorts of things that used to be free. Dan Garton, American's vice-president for marketing, defends these practices.
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If customers want low fares, he says, they must be ready to give up certain items -- or pay for them. Budget-minded customers have proved that they will use the cost of the ticket to make decisions on which airline to fly, regardless of how much they will owe in fees, he says.
On the other hand, frequent fliers and business people are willing to spend extra for their transportation comfort, he says, and American does not impose extra charges on them. As Garton puts it: "For the least expensive fares, itÕs à la carte; for the more expensive, it's a fixed price."
Garten says customers have to understand that airlines are trying to give good service at the lowest price possible. Says Garton: "You can't say you're being ripped off by an industry that's losing money."
Southwest is having nothing to do with charges for checked baggage and similar fees, but it's charging extra for early boarding and a variety of other services. It will soon add services such as at-seat Wi-Fi -- yes, for a fee.
For the time being, Garton adds, Southwest will slow its growth but will not abandon a single city and will increase service to some cities. Cutbacks will come in frequency of flights, he says. Two cities that are connected by six flights a day could go down to four flights a day.
Reader Comments (3)
Posted by: Mike at 12/30/2008 02:44:38 PM
Well, I have turned to fly with Southwest whenever I can. They can put fees on whatever option they want; unfortunately, luggage is seldom an option and I do not want to fight against other people for a spot on the overhead compartment. I believe I am not the only one having the same judgment. Oh, I am an elite frequent flyer with Continental..
Posted by: Sam at 07/14/2009 06:22:55 PM
I draw the line at paying to check a bag. In the summer, my bags weight considerbly less as compared to the winter. The whole purpose in charging for bags was the increase in the cost of fuel.
Posted by: Carolina at 10/02/2009 12:47:00 PM
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