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Ancillary Revenue Update: New Charges, Hidden Fees & What You Can Do

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As Peter often says, we are now living in the land of the brave and the home of the fees. And it’s only getting worse. Just last week, consulting firm IdeaWorks reported that airlines earned $22.6 billion in ancillary fees in 2011–a 66 percent increase from 2009. Peter and Los Angeles Times reporter Hugo Martin look at the most recent findings to break down where fliers are being charged and if there is anything you can do about it.

Peter Greenberg: There is no debate, $22.6 billion is a whopping number!

Hugo Martin: Ancillary fees have been going up steadily since 2008 when the airlines first discovered that they could make a real profit from this section. It was about the time the recession started hitting and they said ‘hey lets find a new way to make money’ and, sure enough, they found it with these fees.

PG: They found consumers willing to pay them!

HM: And we keep paying them. For the last couple years, the demand for airline travel has been going up. The biggest fees are baggage fees obviously, most people can’t avoid those fees. Recently, Wi-Fi fees have been making a lot of money. Fees for food and for upgrading to seats with extra leg room are also bringing in revenue for the airlines

PG: Not too long ago that if somebody told you that you were upgraded it meant you got moved up to first class. Today, being upgraded means that the airline has waived the first baggage fee.

Is there a solution to these fees? Is there a way for people to adequately budget their trip anymore?

HM: There has been a lot of complaints from business travel managers for large companies that they cannot budget for these ancillary charges–they don’t know what their employees are going to pay for baggage or food.

Same thing for just leisure travelers. The average traveler does not know exactly what he or she is going to spend when flying. The airlines keep adding these fees.

At last the Department of Transportation has required transparency. When you buy your airline ticket, there will be links on the website so you can see what all the potential extra charges. Use that information to decide to get a seat with extra leg room or buy a meal or get a pillow or whatever else you might want to do.

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