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Continued: Airfares down, but not fees

  • Article by: SUZANNE ZIEGLER , Star Tribune
  • Last update: March 27, 2010 - 7:20 PM

The price to fly out of the Twin Cities is dropping. On paper, at least.

Round-trip fares out of Minneapolis-St. Paul International Airport fell 15 percent between 2000 and 2009 and more than 30 percent between 2008 and 2009.

But government statistics also show that MSP travelers are still paying more than travelers in similarly sized cities, and more than the national average.

And any money saved on airfare has been gobbled up by escalating fees that airlines have turned to charging for items that were once free as they've tried to cope with the travel slowdown.

In the first three quarters of 2009, Northwest Airlines took in nearly $206 million in baggage fees. Delta charged passengers $350 million, more than double from the year before. For all airlines, passengers shelled out nearly $2 billion for baggage and $1.8 billion to change tickets.

With many heading out for spring break this week or looking at summer travel plans, experts predict airfares will start to inch back up, partly because of pent-up demand. And the fees? Get used to them.

"The fare that you see may be lower than it was two or three years ago. But the actual amount of money that you're going to pay is higher and sometimes considerably higher, especially if you're traveling with your family," said consumer travel expert Chris Elliott.

With the fees here to stay, he said the next issue is disclosure. "Can an airline or online travel agency still quote a low 'base' fare minus taxes and mandatory charges, duping passengers into making a purchasing decision -- or should it disclose all of your costs upfront?" he asked, adding that it might be time for Congress to take a stand on the issue.

Falling fares but...

Nationally, airfares are dropping, down 9 percent since 2000 and 14 percent between the third quarters of 2008 and 2009, the most recent time frame available.

Capacity cuts -- which have airlines flying smaller and fewer planes on certain routes -- were supposed to bring prices up. But business travel blogger Joe Brancatelli said the lack of demand is keeping prices down.

"The only thing that drives fares up is whether people want to buy [tickets]. It doesn't matter whether you have one seat of 100 seats," he said, referring to the airlines' cuts.

But all in all, he said, many people chose not to fly because of "hideous security rules, uncomfortable airline flights, nasty airline policies. So suddenly that driving trip to Montana is looking pretty good."

Elliott agreed, saying it's the consumer who sets fares. "For the last two years, we've just said: We chose not to fly."

Minneapolis travel expert Terry Trippler said one reason fares have dropped is that travelers are switching -- and staying -- with the low-cost carriers. "A lot of business travelers are saying we're not going to take that $1,200 fare," he said.

MSP's average round-trip airfare last year was $321, which is the 34th-highest among the 100 largest U.S. airports. The national average was $306. No. 1? Huntsville, Ala., at $492. Least expensive? Atlantic City, N.J.: $165. Among the 66 airports with cheaper airfares than MSP: Boston, $319; Denver, $283; Detroit, $313, Fort Myers, Fla., $232, and Pittsburgh, $282.

"Minneapolis, like many hub cities across the country with legacy airlines, tends to be pretty expensive," said Rick Seaney, CEO of the travel website Farecompare.com. The arrival of Southwest Airlines last spring and Delta's drop in prices helped contribute to the overall decrease in the Twin Cities, he said.

Travel light

Most cash-strapped major air carriers have started charging for items that used to be free, including adding fees to checked luggage in 2008. Before that, airlines did not charge for the first or second piece of baggage unless they exceeded the weight limit. Now, economy class passengers generally pay $25 for the first piece and $35 for the second, causing many passengers to jam the overhead bins with carry-on luggage or, in some cases, ship their luggage ahead.

Seaney said airlines have been balking at the idea of systemwide increases.

"So what they've done is they've continued to run up things like bag fees and peak travel surcharges," he said. "They're still extracting their pound of flesh but it's more like pinpricks instead of across the board."

Elliott said the fees mean that consumers can pay 30 to 50 percent more than their ticket price.

"The airlines said to us you know, so you want a cheap airfare. OK. We're just going to give you a seat on the plane and everything else is going to be extra. You want a reservation, it's going to cost you. You want food, it's going to cost you. You want a drink, it's going to cost you. You want to check some luggage, it's going to cost you," he said.

He said "bad airline fees" are something that used to be free. But good ones are optional items, such as wireless Internet.

"If you want to pay extra for it, that's fine," he said. "But the first piece of checked baggage, it used to be understood that you would check one piece of baggage and it was free, it was part of your airfare.

Elliott said that consumers who have put off traveling for two or three years are going to be more willing to book trips this summer, which should cause ticket prices to tick back up.

Seaney agreed, saying prices have been firming up the past six months.

"The pendulum has swung in the direction of airlines away from consumers for pricing power," he said.

Suzanne Ziegler • 612-673-1707

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