State of the Airline Industry

The airline industry is flying to places no one wants to go. Places like extra fees and hidden charges, places that your wallet isn’t ready for.

Earlier this week American airlines announced that it will start charging passengers fifty dollars to fly coach on stand-by. The airlines says they are trying to ease the congestion caused by stand-by passengers during boarding but do admit there is some revenue involved. And it’s just the latest in the long list of additional charges for bags, blankets, headsets and special meals. CBS Travel Editor Peter Greenberg says in these low travel times these fees are keeping planes in the sky.

“It’s called ancillary revenue. The airlines make more money from ancillary revenue in terms of profit then they make from the actual ticket sales themselves. They get you in on being competitive on price but where is their competition on value. So it’s all nickel and diming, it’s all ka-ching ka-ching. They call it a la carte pricing, I call it a declaration of war.”

Greenberg says these days the most successful airline will be the one that can lose money the longest. And consumers will be paying for it, so the next time you fly, pack light and bring your own blanket.