Mad as Hell About Airline Fees – How Hidden are They?

A few weeks ago, a coalition of travel and consumer groups took on the airlines, declaring “I’m Mad as Hell About Hidden Airline Fees and I’m Not Gonna Take This Anymore!

Mad as Hell

Blind Rage is a bit closer to the sentiment “Mad as Hell Day” should inspire. Perhaps “Confused & Mildly Frustrated Day” would have been better
Photo Credit: Ferdi’s – World | Flickr

It all culminated Thursday, September 23: “Mad as Hell Day.” Considering my Catholic upbringing and familiarity with the 1976 film Network that popularized screaming “I’m Mad as Hell,” I was naturally anticipating disruptive actions of Armageddonal proportions.

Mad as Hell Day commemorated the deadline for public comment on proposed US Department of Transportation consumer protection rules outlined in docket number DOT-OST-2010-0140.

The combination of high rhetoric and selection of a baffling video spokesperson appears to have resulted in a considerable portion of petition signers whose stories oppose the airline fees or baggage policies themselves as opposed to the petition’s request that airlines display ancillary fees on web sites and distribute them through global distribution systems.

To set the record straight, for 30 years, I have been a strong proponent of providing consumers with clear policies and total pricing, upfront in the shopping process, inclusive of all mandatory taxes and fees – not just for airlines, but hotels, car rental, cruises, tours and event tickets. I completely agree that travelers should be able to easily compare product features and pricing.

Unfortunately, coalition founders American Society of Travel Agents, the Business Travel Coalition and the Consumer Travel Alliance, don’t provide sufficient detail regarding when and how these fees should be presented.

It would have been more beneficial if the petition provided specifics like presenting baggage fees prior to payment entry, on booking confirmations, etc.

The End Game
Unbundling airline fees has created incremental revenue opportunities for airlines and has hypothetically reduced prices for travelers willing to forgo various amenities. The challenge is that there are now a great number of mandatory taxes and fees as well as highly discretionary fees that may be applicable to any flight – a partial list includes:

  1. Baggage Fees
    • First Checked Bag
    • Second Checked Bag
    • Additional (3+) Bags
    • Overweight Bags
    • Oversized Bags
    • Carry-on Bags
  2. Inflight Fees
    • Blankets/Pillows
    • Booking (Telephone/Counter/Online)
    • Food
    • Internet
    • Pets
    • Premium Seats
    • Seat Assignment
    • Ticket Changes
    • Unaccompanied Minors
  3. Taxes Other Mandated Fees
    • I Beg Your Mercy – Please Don’t Make Me List Them All…

Airline passengers basically want to understand a four basic pieces of information when they travel:

  • What is the minimum amount am I REQUIRED to pay?
  • What must be paid for OPTIONAL SERVICES I deem NECESSARY for this itinerary?
  • What are the costs for ADDITIONAL SERVICES I MIGHT want to consume?
  • What is the TOTAL INCLUSIVE PRICE?

Providing a seamless method to answer these questions for travelers at various stages of the Research / Planning / Booking / Travel process would be ideal, but in some cases, fee levels are highly dependent on passenger personalization – both from a supplier relationship and a specific itinerary perspective.

To cut to the chase, passengers want to know that they are receiving the best value available, considering their eligibility for any special discounts or value added services.

This challenge is not unique to the travel industry.

As a point of reference, both eBay and Amazon went to considerable effort to clearly integrate shipping fees into the total price calculation for products sold on those sites – including the ability to mix and match fees associated with varying levels of service or customer status.

A federal mandate was not required, it simply made good business sense to increase conversion and customer satifaction.

Complicating the travel equation are the interrelationships of the global distribution systems, online travel agencies, and meta-search sites that comprise a considerable portion of air sales volume. A major gap is that the travel industry is currently ill-prepared to facilitate the uniform capture, presentation and transaction of these fees for consumers from both a technical and business model perspective.

Full Speed Ahead
The airlines have contributed to the confusion. First, they got a bit ahead of themselves – lured by the capability to quickly increase revenues during an economic downturn. Second, they skipped developing the processes and systems to effectively communicate the new policies and transact the new fees.

This “Damn the Torpedoes” approach by airlines is not new – I recall the Northwest Orient Airlines / Republic Airlines merger in the mid-1980′s. The Republic and Northwest reservation system were not properly integrated on the date the operations merged and chaos ensued.

Northwest management knew what was going to happen, but it would simply take too long and cost too much to integrate the systems properly. They knew customers would endure the inconvenience. Passengers might be unhappy, but they wouldn’t stop flying Northwest. Limited alternatives exited, especially for those relying on hubs, and consumers were generally unwilling to stand by their principles if it meant a trade-off in terms of time, cost or convenience.

The same holds true today. Air traveler satisfaction may be low. Passengers who are “Mad as Hell” are protesting. However, there is no more soothing balm for an airline executive in 2010 than several hundred million dollars of revenue that can be collected now, as opposed to sometime in the future.

Most importantly, by unbundling airfares, major network carriers are better able to promote base fares that match those offered by the low cost carriers. Complete fare transparency, an efficient process and broad customer understanding potentially results in market share loss to carriers able to offer passengers a lower total inclusive price.

Fixing the problem might increase customer satisfaction, but it might also hurt profits for particular airlines. I don’t see a lot of network carrier CEO’s queuing up to expend the political capital required to advise shareholders that customer satisfaction will pay the greatest dividends in the long term – they are too busy focusing on the next quarter.

I am not defending these practices, just reporting the business realities of why many airlines are behaving in this manner.

Hide or Go Seek?
The Mad as Hell coalition chose to target its efforts on baggage and seat assignment fees. In the process, they made some very strong accusations that merit closer scrutiny.

The most egregious claim was:

Exposing the airlines’ false claims that their fees are all available on their websites by filming the seven websites, 47 pages, and 11,000 words a typical traveler would need to examine to find the only widely-accessible fees, those for baggage.

Wow – that sounds like a lot of difficult work. Just imagine if they had considered using that newfangled tool called Google to locate that information…

I agree that many airlines could provide improved navigation and access to the ancillary fee details, but in many cases, the same could be said for the booking processes on their web sites. Often, this is not the result of intentional deception, just poor site design.

To test my theory that bag fees may be more accessible than described by the Mad as Hell group, I searched for the term “[Air Carrier Name] Fees” and found the following links normally in the top listing on the results page, and only once below the second organic listing. I also expanded my search to include 15 major US airlines and 10 travel sites representing a cross-section of the industry focusing on air fares and fees.

Here is what I found:

Airline Baggage Fee Links – Major US Airlines & Travel Sites

Site

Baggage Policy/Fee Link

Airline Sites

AirTran

http://www.airtran.com/policies/carry-on_checked.aspx

Alaska

http://www.alaskaair.com/as/www2/help/faqs/CheckedBaggage.asp

Allegiant

http://www.allegiantair.com/aaRes/aaRes_popup_BaggagePolicy.htm

American

http://www.aa.com/i18n/travelInformation/baggage/baggageAllowance.jsp

Continental

http://www.continental.com/web/en-us/content/travel/baggage/checkbag.aspx

Delta

http://www.delta.com/traveling_checkin/baggage/index.jsp

Frontier

http://www.frontierairlines.com/frontier/plan-book/travel-info-services/baggage/checked-baggage.do

Hawaiian

http://www.hawaiianair.com/AboutUs/Pages/Faq.aspx

JetBlue

http://www.jetblue.com/deals/first-bag-free/

Midwest

http://www.midwestairlines.com/TravelTools/Baggage.aspx

Southwest

http://www.southwest.com/html/customer-service/baggage/checked-bags-pol.html

Spirit

http://www.spiritair.com/Policiesbags.aspx

Sun Country

https://www.suncountry.com/hometools/helpBaggage.shtml

United

http://www.united.com/page/article/0,6722,52481,00.html

US Airways

http://www.usairways.com/en-US/traveltools/baggage/baggagepolicies.html

Travel Sites

airfarewatchdog

http://www.airfarewatchdog.com/blog/3801089/airline-baggage-fees-chart-updated/

ASTA

http://www.asta.org/elibrary/content.cfm?ItemNumber=3783 *Login Required

Expedia

http://www.expedia.com/daily/flights/airline-fees.asp

FareCompare

http://www.farecompare.com/how-to-shop/domestic-fee-chart.html

Kayak

http://www.kayak.com/airline-fees

Orbitz

https://faq.orbitz.com/app/answers/detail/a_id/7041 (By Carrier)

SeatGuru

www.seatguru.com Great Depth of Information – By Carrier & Aircraft

Smarter Travel

http://www.smartertravel.com/blogs/today-in-travel/airline-fees-the-ultimate-guide.html?id=2623262

Travelocity

http://leisure.travelocity.com/Promotions/0,,TRAVELOCITY%7C4985%7Cbag_fees,00.html

TruPrice

http://beta.truprice.net/Air/

This provides irrefutable evidence that the airlines are really bad at hiding their fee information.

In virtually all cases, links for the fees appear on the carrier websites prior to the customer being charged, however the traveling public is notorious for not reading terms & conditions and fail to notice the links. Therefore, describing the fees as “hidden” is not entirely accurate. When consumers contest fees, the carriers are typically quick to highlight exactly where the fee was disclosed during the booking process.

As a result, the core problem is not technically disclosure, but more the process of when and how these fees are disclosed to passengers during the shopping and booking process. The devil is in the details and the key to resolving this issue involves the degree of detail to be provided by the airlines as the fees themselves are frequently complex and often counter-intuitive.

While airlines are behaving fairly responsible in communicating fee changes to brand loyal flyers, the presentation and communication processes are not consistent between airlines, making competitive comparisons challenging. The matter is amplified when it hits the global distribution system, online travel agency and meta-search tiers of the distribution network where comparison shopping is the norm.

Would You Like to Be Seated Now or Later?
Seat assignment fees are a great example of a problematic operational area. It is also an area that is receiving considerable focus from the Mad as Hell organizers.

Interestingly, when I reviewed the customer stories on the madashellabouthiddenfees.com website, there were no examples provided regarding premium seat fees being hidden – all comments were generally concerned with the general practice of airlines charging for premium seat assignments. I did not get a sense that people were mad as hell about “hidden seat fee information.”

Currently, seat assignment fees may be assessed at various times in the customer contact cycle:

  • Prior to Booking
  • During the Booking Process
  • At End of the Booking Process
  • After Booking is Transacted
  • At Flight Check-In

Plus, in many cases, if one chooses not to manually select or pay for a premium seat assignment in advance, the airline may assign a standard seat at no cost. If the airline does not assign a seat at the time of booking, at check-in, a passenger normally does not need to pay for a seat assignment that may have previously only been available for a fee.

Worse yet, unlike bag fees that comprise a standardized policy for the airline as a whole, premium seating fees may be tied to the specific aircraft, seat pitch, available seat inventory, frequent flyer tier, and in some cases, the length of trip, among other criteria. Based on current technologies, accurate presentation and pricing by a third party could may entail a considerable amount of enhanced processing.

Generating seating-specific cross-carrier comparisons – particularly accounting for non-aligned product variations can present a daunting challenge. The best of the travel industry online players have not yet stepped up to tackle this one.

Again, this issue is not solely a problem with airlines. If you think comparison shopping of aircraft seating options is challenging, try comparing hotel pricing across sites for king bedded, deluxe rooms. Just like airline seating, it would be great capability to have, but the underlying platforms are not yet in place to do this efficiently.

True, there are technical methods to present accomplish it, but is a federal regulation really required to quell the uproar from dissatisfied travelers?

None of Your Business
Perhaps the greatest obstacle in the distribution of ancillary fee airline products by third parties is the absence of a negotiated business model between the airlines and the GDS networks. As the current business model has airlines paying GDS groups to distribute their air seats to both traditional and online travel agencies, it is unlikely that the GDS will be willing to distribute airline inventory producing ancillary revenues for free.

It is also clear that these unbundled services are being used by the airlines to differentiate themselves with consumers, increase loyalty and drive traffic to their websites. For example, Delta Airlines waives baggage fees for holders of the co-branded Delta American Express Card. For both competitive and consumer privacy reasons, Delta has little interest in broadly sharing that list of loyal & highly valued revenue generating customers with third parties.

Without a well defined business model that appropriately compensates all parties involved, as well as interface specifications that protect customer information, it is unlikely that the federal government will step in to mandate that these fees must be distributed through the GDS. Nobody – the airlines, the GDS’ or the government are interested in having the US government unilaterally define the business and interfacing terms for the travel industry.

Raising the Standards
The challenge is not so much the technical complexity, but standardizing interface processes between business partners to validate consumer eligibility and ensure secure consumer transactions. This too represents a layer of complexity that makes open access to ancillary services by third parties a challenge.

When it comes to sharing information within the travel industry, XML interface specifications take center stage.

Not to delve into the controversy surrounding the establishment of standards for airline ancillary revenues, but the recent news that the Open Axis Group, backed by the major US airlines and licensee of the Farelogix XML schema has agreed to cooperate with the more broadly supported travel industry Open Travel Alliance was welcome news.

This understanding provides important alignment and can serve as a reference point for planned implementations by each GDS. While similarities in interface specifications are obviously important, the stumbling blocks tend to be the subtle differences that may exist between implementations of those specifications.

If the Department of Transportation was to require electronic distribution of all ancillary services through all channels as demanded by the Mad as Hell coalition, the most important question would be how. If not properly defined, the solution could turn out to be very expensive for the travel sellers if airline customer personalization

Rallying the Troops
The most contentious aspect of the “Mad as Hell About Hidden Airline Fees” is the tag line “And I’m Not Gonna Take This Anymore.”

Them is fight’n words.

But where is the call to arms? No devastating ultimatums? No unilateral demands? No unpopular, but necessary display of solidarity and punishing strength?

“And I’m Not Gonna Take This Anymore” conjures images of desperate individuals willing to risk making the end justify the means. I simply don’t see public demand to allow brick & mortar travel agents to transact ancillary airline products running at that level of fervor.

The call to action is signing the petition addressed to US Secretary of Transportation Ray LaHood. With such high stakes and rhetoric, one could assume that the petition should be labeled “NSFW” and that children’s ears should be shielded from its searing words.

The petition begins with the explosive statement that the signatories “are deeply concerned about the problem of hidden airline fees” and ends with the incendiary closing to “ask that you protect all air travel consumers from hidden fee abuse.”

Regardless, this all culminated Thursday, September 23rd, 2010, Mad as Hell Day, when… nothing happened except a press conference.

No human chains across airport runways, no sit-ins at TSA screening points, no vows to boycott air travel until all fees are appropriately disclosed…

Protestus Interuptus
Considerably more happened on Monday, September 20, three days before Mad as Hell Day, when Ray LaHood met with representatives from the CTA, BTC, National Consumers League, a travel procurement professional and an individual traveler. I am not certain why a representative from ASTA was missing – perhaps LaHood’s office had limited seating and the travel agent group drew the short straw? Considering that agent access is a major plank in the platform, this constituted a baffling absence.

The always level headed DOT Secretary commented “Airline passengers have rights and should be able to expect fair and reasonable treatment when they fly. We’re proposing to strengthen consumer protections and raise the bar for airlines when it comes to treating passengers fairly.”

What LaHood should have said was “Where the hell are your specific recommendations that respond to the questions posed in my rules document?” or “If you are so determined for us to mandate access to GDS, OTA and travel agents, then why the hell aren’t their representatives in this meeting?”

Everyone can agree consumer rights should be protected. The hard part is figuring out how. If the Mad as Hell group was serious, they would be providing a major focus on HOW, not just Who and What.

Betty and Howard – Kindred Spirits?
Personally, my favorite aspect of this strange protest movement is its choice of video spokesperson.

A high stakes topic demands a high stakes promotional effort. In the only video on the madashellaboutfees YouTube Channel, spokesperson Betty Stuart smacks down the high-flying airline industry and demonstrates exactly what it looks like when someone is “Mad as Hell” about airline fees…

It is not surprising that the only “like” vote was provided by the channel owner. With 500 views, there does not appear to be a groundswell of activism following Betty’s counsel to “Demand Change.”

Peter Finch, in his academy award winning role as Howard Beale in 1976′s Network demonstrates behavior somewhat more consistent with someone who is “Mad as Hell.”

The Obvious Solution: Your Seat v. Their Seats
This ancillary fee issue is not about a desperate need for government regulation. Mandating a tax/fee inclusive total price disclosure might be, but that aspect of the proposed DOT rules is never mentioned by the Mad as Hell coalition.

No, the ancillary fee issue is about money, respect for customers and the resolve of those customers to put their seats into the seats of airlines that are appropriately engaged and addressing their needs.

Protesters that are “not gonna take this anymore” you should be prepared to either:

  1. Stop using the product or service
  2. Convince others to stop using the product or service

Otherwise, I’m sorry to say, you are taking it… and merely whining about it.

True, some carriers may only provide improved fee transparency when compelled by the government, but those carriers have already either decided a) to disregard their customers’ needs, or b) that their customers will continue their patronage despite sub-optimal ancillary fee transparency.

If there is government intervention, there will be an extended period to allow both carrier and distribution systems to comply with the new regulations. The government wants no part in dictating business models, so applying strict distribution regulations will be difficult. One thing is for certain, due to the technical nature of the solution and the alignment required among multiple players, don’t expect for any significant compliance deadlines falling before late 2012.

On the other hand, if a carrier identifies that improving the transparency of its ancillary fee processes will generate a material positive impact on profitability, changes will happen pretty damn quickly.

If the Mad as Hell group wanted to effect change, without resorting to federal mandate, there are four fundamental requirements:

  • Clear expectations defined for the carriers regarding exactly what fees need to be presented during which steps of the shopping and booking process.
  • A scorecard to track the degree of compliance by each airline with the guidelines.
  • Definitive steps that will be taken if the carriers do not provide adequate fee transparency.
  • A large, unified and highly resilient group of followers willing to make personal sacrifice for the greater good.

The last point is the most critical. Without a sizable number of passengers willing to change flying habits or alter carrier loyalty, celebrating a “Mad as Hell Day” would seem to be either: a) an unnecessary waste of time, or b) a gratuitously sensationalized title for a non-event.

Is it appropriate to have a “Mad as Hell Day” when there are no organized activities for enraged followers that “Are Not Gonna Take It Anymore” to express their dissatisfaction? Seems pretty disingenuous.

One suggestion – When designating a specific date with a call to action being the signing of a petition, there is a great time-proven formula for success: Hold the rally day BEFORE of the deadline for submitting the petition. That way, it provides ample opportunity for anyone made aware of he cause on the celebrated day to include their signature.

Perhaps in the interest of full disclosure (along the lines of that demanded by the group of the airlines,) a more accurate name would be “I’m Reasonably Irritated About Complex Airline Fees, So I’m Gonna Sign a Petition” paired with “Confused & Mildly Frustrated Day.”

On a serious note, I would be most interested in hearing the solutions proposed by the legions of Mad as Hell Day supporters, specifically:

  1. What business model will be applied to GDS, OTA and travel agent distribution of airline ancillary services?
  2. What interface specification will be utilized to ensure the broad interoperability of XML messages across the travel industry?
  3. What timeframe will be established for airlines and the distribution channels to adopt new legislated standards?
  4. What penalties should be applied for airlines, distribution channels or travel sellers (including travel agents) that are not able to comply with the new regulations?

Or will all these decisions be left for the federal regulators to decide? Guessing those sessions hammering out segment fees and XML data schema might not be C-SPAN ratings winners.

My advice to the Mad as Hell supporters: No pain, No gain.

When it comes to resolving the challenge of clearly communicating ancillary airline fees, that pain will undoubtedly be shared the air carriers and those selling travel through various distribution channels.

When protesting to effect positive change involving complex issues, history has demonstrated that considerable pain and sacrifice is also involved.

The Mad as Hell followers are actually more than willing to take it some more – travelers are not changing their behavior, merely demanding that the airlines change theirs under the threat of government intervention.

If the group was truly Mad as Hell and honestly refusing to Take it Anymore, they would ask their supporters use the one weapon that the airlines lack – Wallets. A dramatic demand for action by cutting off the supply of airline passengers and starving them out, if effectively executed, would rapidly produce results.

Instead, there seems to be little resolve to punish carriers that violate specific policies, partially because those policies have not yet been clearly defined.

Having 50,000 people enter their name, address and e-mail information into a web form is a solid accomplishment. Having clearly defined, executable solutions is even better. But it’s best to avoid unnecessary sensationalism that hypocritically obscures the reality that information is not actually hidden and new undefined business processes are required to benefit all parties in the value chain.

The series of meetings envisioned at airline hubs with travel managers and travel agents is a good start, but why meet at airline hubs and not include the airlines? Does the Mad a Hell moniker contribute to an atmosphere that encourage the understanding and open communication required for proactive problem solving? Uh, no.

Hyperbole clouds the true nature of the issues, confuses supporters and obstructs progress. And the last thing that ancillary airline fees issue needs is more confusion.

About Robert Cole

Robert Cole is the founder of RockCheetah, a hotel marketing strategy and travel technology consulting practice. He also authors the Views from a Corner Suite Blog and publishes the Travel Quote of the Day. Robert speaks regularly at major travel industry conferences, authors articles for leading travel industry publications, advises travel-related startups and the equity investment community. He is an evangelist for the global travel industry.