Have You Heard? It's "Mad as Hell Day"

Sep 23 2010 Have You Heard? It's "Mad as Hell Day" BY sgf-admin TAGS Fares


In case you haven't heard, today is Mad as Hell Day — as in, "are you mad as hell about hidden airline fees?" Mad as Hell is "is an initiative of the American Society of Travel Agents (ASTA), Business Travel Coalition (BTC), and Consumer Travel Alliance (CTA), three organizations that represent nearly every segment of the traveling public, from leisure and business travelers to corporate travel departments and online and offline travel agencies." That's what is says on the Mad as Hell web site.

Some of you may remember one of these three organizations, the Business Travel Coalition.  This organization fabricated a report a couple of years ago declaring that Springfield was going to lose most of its air service. But I digress...back to the subject at hand!

Many people are mad about airline fees and who can blame them? We all understand that airlines need to make money, but when will they get serious about customer service? Take, for example, the fees for checked bags.  You pay to have the bag put on the plane, but the airlines are generally unresponsive if the bag is damaged or lost. The fact that you paid to have that bag put on the plane is irrelevant. The airline response is basically, "too bad."

Airlines are their own worst enemy...

And then there's the issue of "hiding the fees." Check out this quote from a story earlier this week, in Bloomberg News: David Castelveter, a spokesman for the Air Transport Association trade group in Washington, said in an e-mail that fee information is already available on carrier Web sites. "Airlines fully support price transparency," he said.

Are the fees prominently displayed at ticket counters? Is there a big red button on airline home pages that says, "Fee Info Click Here?" Where can you find information about "telephone reservation fees, checked baggage fees, seat reservation fees, carry-on luggage fees, special seating fees, get-on-the-plane early fees, pillow-and-blanket fees?" If you find the information on an airline web site it's because you spent 15 minutes drilling down into the site, sometimes going through the process of making a reservation before the fees revealed themselves. It's easy to conclude that the airlines don't think it's in their interest to be transparent. It's mind-boggling. If customers knew about the fees before hand wouldn't there be less anger?  More than anything, it's the SURPRISE that really infuriates.

Here's the really sad part...

The airlines have a story to tell.  It's a compelling one that does make business sense and it fully explains why they feel fees are necessary. Do they tell it? No, they just continue to shoot themselves in both feet.

Here's their story, in a nutshell...

As an industry, the airlines have been losing money since the turn of the century. First came the events of September 11, 2001. Just as the industry was finally recovering from that came the energy price spikes of 2007-2008. Remember when oil hit $150 a barrel? The airline business plans were equipped to deal with prices at no more than $50-$60 a barrel. They were bleeding money and raising fares. Customers pushed back and then came the Great Recession. In response, the airlines cut service and fares across the board. The Air Transport Association (ATA) now refers to the first ten years of this century as the "Lost Decade." In a recent press release, the ATA said this:

"Domestic seating capacity dropped 7 percent in 2009, the sharpest decline in 67 years. The cuts in 2008 and 2009 erased 10 years of industry growth, leaving domestic seating capacity 1.3 percent below 1999 levels…" In case you're wondering, this quote from the ATA does pass the smell test. It's been confirmed by numerous independent analysts.

Here's the real kicker. Despite the rise in fares this year, the average domestic fare, when adjusted for inflation, is the same, or less, than it was 20 years ago. Study after study has found this to be true for at least the past five years.

The airlines have learned that we Americans are stubbornly resistant to paying fares that actually pay for the cost of running an airline. This is why the airlines began charging fees. Airlines look at fees this way: you, dear customer, have a cheap fare. And you don't have to pay these fees; that's your choice. You don't have to check those three 60 pounds bags for a weekend trip to Las Vegas...

That's the story the airlines could tell, but they don't. Instead, they hide fees and lose that bag you paid $60 to check.

Not only are airlines their own worst enemy, they are completely tone deaf.


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