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What passenger fees will airlines think up next?

November 04, 2012|By Hugo Martin | This post has been corrected, as indicated below.
(Reuters )

The amount airlines are pocketing on passenger fees continues to rise, prompting the question: What new fees can carriers think up?

The world’s biggest airlines are expected to collect $36.1 billion in passenger fees — including charges to check bags, buy food and drinks and log into on-board wireless Internet — according to a study released last week by Wisconsin-based IdeaWorksCompany, a consultant on airline revenues, and Amadeus, a travel technology firm based in Madrid.

The latest total represents an 11.3% increase, compared with the $32.5-billion estimate for 2011, according to the study.

One reason for the increase, the author of the report said, is that airlines and travel agents have made it easier to pay for such extra charges at the time you book your flight online, instead of waiting until you get to the airport or to your seat to pay.

[For the record, 8:03 p.m. Nov. 23: A previous version of this story said Orbitz offers a $50 deal that lets travelers check two bags free of charge and sit in roomier seats near the front of the plane. The offer is available only on flights with Frontier Airlines.]

The travel website Orbitz, for example, offers a deal that lets you pay an extra $50 when you book a Frontier Airlines flight online, letting you check two bags at no additional charge and sit in a roomier seat near the front of the plane.

“They are understanding how to raise and lower fees to maximize overall revenue and how to better position items in the booking path to drive better sales,” said Jay Sorensen, president of IdeaWorksCompany.

What new fees can you expect in the future?

Joe Brancatelli, who writes a weekly travel column for the business travel website Joesentme.com, said airline executives must get creative because they have already adopted charges for almost every extra service offered.

“The low-hanging fruit is gone,” he said. “They are going to have to invent products.”

Brancatelli predicts, for example, that airlines will push harder to get you to pay for extras like luggage delivery services, travel insurance in case you need to rebook a flight, higher fees for faster onboard Wi-Fi and hotel and car rental package deals.

“Airlines are looking for anything they can do to raise revenue,” Brancatelli said.

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Follow Hugo Martin on Twitter at @hugomartin

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