Paying for your free tickets, and other new airline charges
July 11th, 2008 | by mbhunter |Airlines are hurting pretty badly because of rising fuel costs. Each $1 rise in the cost of oil causes an annual rise of tens of millions of dollars for fuel for a typical airline. And we’ve seen a whole bunch of $1 rises lately.
Northwest Airlines recently planned to cut 2,500 jobs as the high price of fuel reduces the number of daily flights and the number of needed personnel.
The airlines, Northwest and others, have been instituting new fees, and increasing existing ones, to offset the costs of fuel on tickets already sold, and to trim losses on their balance sheets. Douglas M. Steenland, chief executive of Northwest, estimates that the new fees will generate $250-$300 million in revenue.
$15 for the first checked bag. An increased ticket change fee of $150 (up from $100).
But the new fee that caught my attention will be unfortunate news to frequent fliers: a fee of $25 to $100 for redeeming a frequent-flier ticket.
Yup, after September 15th, frequent fliers at Northwest will get the privilege of paying for their previously-free tickets.
Does this take all of the fun out of frequent-flier programs and airline reward credit cards like the WorldPerks® Visa® Platinum Card or the JetBlue Card from American Express? It probably doesn’t take out all of the fun, but it will pay to check out your travel plans and your spending plans to see if programs or credit cards like these stand up to other options, since redemption of airline miles will become more restrictive, and may even require some cash out of pocket to redeem. (It might be time to can the airline cards and just go with one that gives you cash back right on your next bill, like my old standby the Chase Perfectcard® Mastercard®.)
The one silver lining of all of this is that flight, though more expensive, will get a little bit less congested.
4 Responses to “Paying for your free tickets, and other new airline charges”
By Adam on Jul 11, 2008 | Reply
I’m going through some of this right now. My fiance and I are planning our honeymoon. We’re getting married this fall, but want to head to Europe next spring for a few weeks. I’ve actually got the frequent flyer miles for the free tickets, but it’s still going to cost me over $700 in fuel surcharges, taxes and fees. This at least includes my baggage (Air Canada hasn’t started charging for that, not yet at least), but it’s still pretty crazy.
By "Mo" Money on Jul 11, 2008 | Reply
Why don’t the airlines operate the way other businesses do and that is to charge what it costs to operate their business? Instead they add charges for this and that. If they would only charge what it costs (plus a profit) then the consumer could decide if they wanted to use their service. The current situation results in not knowing how much it could cost if, for example you were a family of four.
By Aryn on Jul 11, 2008 | Reply
Did you hear that US Air cut the movie? Apparently not enough people paid $5 for the headphones, so no more movies on their planes. I suppose that’s a good thing – taking the player out of the baggage compartment will make room for two more bags that people don’t want to pay to check.
By deepali on Jul 14, 2008 | Reply
We redeemed NW FF miles last year and had to pay for the privilege. Excellent.