Happy holidays? Major U.S. carriers add holiday surcharge to fares


takeoffAt this point it’s hardly a question of “if” there will be new airline fees on tickets, but rather “when” and “what” they will be.

And sure enough, as travelers begin to think about Thanksgiving and end-of-year travel, the latest is a “holiday surcharge.” Initiated by United Airlines and American Airlines, and so far matched by US Airways and Delta-Northwest Airlines, the surcharges — for now — are only $10, and only on three days – November 29, 2009, January 2 and 3, 2010.

The operative word is “for now.” Most new airline charges are trial balloons. If they fly, they stay, if they don’t – as in US Airways’ former soft-drink and bottled water charges, they vanish into history. At least for a while.

Some travelers might wonder, why bother adding a surcharge? Why not just blackout discount fares on popular travel days, or limit seats?

The answer is that airlines do that, too. But from a revenue standpoint, the surcharges have several potential advantages.

First, surcharges are exempt from any potential corporate or other discounts. Which means they are undiluted revenue.

Second, a “holiday surcharge” can be placed in the fine print of an ad, along with all the other taxes and fees that few people without super-hero level vision can read easily.

Third, surcharges affect all fares. And while they may be most noticeable on the lower super saver airfares, from an airline point of view, why not make a little extra on the full price tickets for those days? (Especially with late-booking business travelers unlikely enough to have to fly on the Sunday after the holiday, who are most likely going to be paying high prices anyway.)

Fourth, surcharges can be adjusted easily at will, increased and/or expanded if they meet with little resistance, quietly dropped if they aren’t working out or the negative publicity outweighs the extra money.

Admittedly, 2009 is a tough year for airlines, so it’s hard to fault them for trying to boost their bottom line when possible. But since these surcharges are aimed squarely at leisure travelers, who are often watching their own budgets these days, will they be one more push in the direction of staying home for the holidays?

(Photo: brendan/Flickr Creative Commons)

  • Jake

    My congressman is definitely getting an email on this one. It’s a prime example of what should be a simple fare increase, not a backdoor way for the airlines to advertise one price and then charge another – classic bait and switch.

  • John

    Janice … You might have missed another reason to use a surcharge instead of a fare increase. I believe that I read an article on here a few weeks ago that Congress is getting upset because taxes only apply to the base fare not all of the “add-ons.” As a result, the Treasury is losing out on the airline win fall from surcharges and the airlines get to keep 100% of the charges as well.

  • Karen C.

    While putting it as a surcharge may be different, making hay while the sun shines — or during high demand periods — isn’t. I was just at a highly popular trade conference in Karlsruhe, Germany. My hotel room cost 55 Euros/night on the Saturday before the show started and 184 Euros/night once it began. To me, that makes the $10 surcharge during holiday periods sound almost benign. Maybe it will make people spread out their travel — go earlier or come home later — so that everyone doesn’t try to take to the skies on the same day.

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  • Bodega

    John is right on with this. Also, for years the airlines have had fares that would be higher at peak travel times. However, with the internet, they have to be competitive in the initial fare search. By keeping the base fare the same as their competitiors, the shopper might go to them and won’t know the actual ticket price until the final step in the purchase process. Buyer beware!

  • Arizona Road Warrior

    This is a common practice. The prices for hotel rooms are 2X, 3X, 4X and etc. higher for special events such as the Super Bowl, NCAA Final Four, Kentucky Derby, Indianaplis 500 and etc.

    Hotels have low, mid and high season rates…I paid $ 200 per night plus taxes and $ 54 per night plus taxes for the same room at the same hotel in Phoenix…the only difference that one stay was in January and the other stay was in July.

    This is no different for the rental car companies…I have a family reunion that falls on a special event weekend and the rates are at least twice as high as the week before and after this event.

    It is not bait and switch…when a fare is disclosed on an airline website, it states that fees, taxes, applicable check luggage fees and etc. are extra,

  • DaveS

    I have no problem with them charging higher fares on peak dates or limiting discounted seats on those dates. But they better state the fare accurately, or face charges of fraud. The advertised fare should include everything the passenger cannot avoid paying, except for government imposed fees and taxes.

  • Hapgood

    The next new fee will be the “Executive Compensation Fee.” The key to survival for airlines in these turbulent times is the best and brightest leaders putting out 120% to get their companies through the storm into the sunshine of profitability. To increase their leaders’ motivation and ensure dedication and retention, the Boards of Directors are giving top executives a special bonus, funded by a passenger fee since it would be inappropriate to burden shareholders with this expense.