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Southwest Airlines to charge for Internet access

It will install Wi-Fi on its entire fleet of 737s, but unlike with its 'bags fly free' campaign, users will have to pay. Also: Baggage-fee income isn't taxable, and TripAdvisor defends user reviews.

February 06, 2010|By Hugo Martín

Ding! You are now free to surf the Net -- but on Southwest Airlines, you'll have to pay for it.

The carrier that has been flying high by checking your first two bags for free announced plans this week to start installing wireless Internet on its entire fleet of 737s. But it won't be free.

Installation of the Wi-Fi service, provided by Westlake Village-based Row 44, should begin in April and finish by early 2012.

Most airlines charge a fee to use airborne wireless Internet based on the length of the flight, ranging from $5.95 for flights lasting up to 90 minutes to $12.95 for flights lasting more than three hours.

When the airline announced this week that it was moving ahead with plans to offer Wi-Fi, its vice president for marketing and revenue, David Ridley, said in a statement that the airline was "testing a variety of price points" before making a decision this year.

But news that the self-proclaimed low-cost champion planned to charge for the service has sparked some anger.

On the Southwest website, several people posted comments suggesting that Southwest add a few dollars to all fares and include Wi-Fi for all passengers.

Others suggested that the airline stick with its no-fees campaign by giving the Wi-Fi access gratis.

"Southwest is harping on with the whole 'bags fly free' campaign," an anonymous person posted on the website. "Why not build on that brand with free Wi-Fi?"

Said another: "Southwest already rocks the airline industry. Why not rock just a wee bit more and let us have Wi-Fi access for free?"

A Southwest spokeswoman said the airline would continue to rock the industry -- but not for free.

It plans to charge only those passengers who use the service so that passengers who don't go online don't have to pay. "We want to give our customers the option," spokeswoman Whitney Eichinger said.

Bag-fee income is not taxable

The recession-hampered U.S. airline industry got a bit of good news last week when the Internal Revenue Service said revenues from baggage fees aren't taxable.

But the airlines' tax break won't mean lower baggage fees.

After all, charges for checked baggage, food, beverages and onboard Internet drew nearly $2 billion in the third quarter of 2009 for the top 10 airlines, according to the U.S. Bureau of Transportation Statistics. Nationwide, these fees generate nearly 7% of the industry's operating revenues, according to the bureau.

The IRS issued the clarification at the request of American Airlines, which collected $261 million in fees in the third quarter of 2009. The IRS said a 7.5% excise tax on passenger tickets and other airline revenue does not apply to baggage fees because checking a bag is optional.

But the ruling doesn't change much for airlines because they already didn't pay the tax.

"This clarification from the IRS means everything will remain the same as it is since they agree with our interpretation," American Airlines spokesman Tim Smith said.

But it might be good for passengers, said Rick Seaney, founder of the website, which keeps track of airline fees.

If the IRS had ruled that the airlines must pay taxes on baggage fees, he said, the airlines would have passed the extra cost along to the passengers.

Harsh reviews are real, site says

When the travel website TripAdvisor recently posted its annual list of "America's 10 dirtiest hotels," it included some vicious guest reviews.

A former guest of a San Francisco hotel compared her stay to something "from a horrible horror movie."

A past guest of a hotel in Eureka, Mo., said: "If hell had a hotel, it would be something like this."

The reviews at are so hard-hitting that you have to wonder if these hotels are really that horrible or if the reviews are the work of rival hotels, trying to undermine the competition.

For years, rumors have floated throughout the hospitality industry that hotel owners often use online review sites such as TripAdvisor, Orbitz, Travelocity and Expedia to post bogus reviews of competitors and issue glowing reports of their own hotels.

But TripAdvisor and the president of the nation's largest hotel association say the reviews are legitimate.

TripAdvisor spokeswoman Amelie Hurst said the company screens every review and investigates posts that raise suspicion. TripAdvisor also uses additional security measures to ensure that the reviews are not posted by hotel management, she said, but declined to elaborate.

In most cases, she said, the sheer volume of reviews posted for each hotel assures that the website is giving a complete picture of the hotel experience.

Besides, she said, many reviewers include digital photos, so proof that they stayed there is often posted in living color.

Hurst said TripAdvisor does not manipulate reviews to benefit hotels that buy ads on the website. "All contents on our site are absolutely not biased," she said.

Joseph McInerney, president and chief executive of the American Hotel & Lodging Assn., said his group has met with TripAdvisor and other review websites to get assurances that the reviews posted online are legitimate.

And although he believes most of the reviews come from hotel guests, he said, review sites are negatively skewed because guests with positive experiences don't write reviews as often as guests with horrible ones.

On a nightly basis, more than 3 million people stay in hotels in the U.S., but only a small fraction of them write online reviews, he said. "The problem," he said, "is that people who have had a bad stay complain."

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