Business

AIRLINES

Cost of flying can be hard to figure

 

The airlines have instituted so many optional fees that it can be tough to find the cheapest fare.

Associated Press

“Airlines want, and expect, their [ticket] distribution partners to offer passengers helpful contextual information to make well-informed purchase decisions, reducing the number of reservations made based primarily or exclusively on price,” said a study commissioned by the association.

Consumer advocates question how airlines would safeguard the personal information they gather, and they worry that comparison shopping for the cheapest air fares will no longer be feasible.

“It’s like going to a supermarket where before you get the price, they ask you to swipe your driver’s license that shows them you live in a rich zip code, you drive a BMW, et cetera,” Mitchell said. “All this personal information on you is going out to all these carriers with no controls over what they do with it, who sees it and so on.”

The airline association said consumers who choose not to supply personal information would still be able to see fares and purchase tickets, though consumer advocates said those fares would probably be at the “rack rate” – the travel industry’s term for full price, before any discounts.

It’s up to individual airlines whether they price fares differently for travelers who don’t provide personal information, said Perry Flint, a spokesman for the international airline association.

The stakes, of course, are enormous. Since 2000, U.S. airlines have lost money for more years than they’ve made profits. Fee revenue has made a big difference in their bottom lines. Globally, airlines raked in an estimated $36 billion this year in ancillary revenue, which includes baggage fees and other a la carte services as well as sales of frequent flyer points and commissions on hotel bookings, according to a study by Amadeus, a global distribution service, and the IdeaWorksCompany, a U.S. firm that helps airlines raise ancillary revenue. U.S. airlines reported collecting nearly $3.4 billion in baggage fees alone in 2011.

One expense airlines would like to eliminate is the $7 billion a year they pay global distribution systems to supply flight and fare information to travel agents and online booking agents like Expedia. Airlines want to deal more directly with online ticket sellers and travel agents, who dominate the lucrative business travel market. Justice Department officials have acknowledged an investigation is under way into possible anti-trust violations by distribution companies.

Airlines also have been cracking down on websites that help travelers manage their frequent flier accounts. The sites use travelers’ frequent flier passwords to obtain balances and mileage expiration dates, and then display the information in a way that makes it easier for travelers to figure out when it makes more sense to buy a ticket or to use miles.

“What the airlines are trying to do right now is reinvent the wheel so they can hold all their information close to their chest,” said Charles Leocha, founder of the Consumer Travel Alliance.

“As we move forward in a world of IT, the ownership of passenger data is like gold to these people.”

By withholding information like fee prices, he said, “we are forced to go see them, and then we are spoon-fed what they want to feed us.”

Read more Business stories from the Miami Herald

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Videos

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category