Tuesday, November 22, 2011

Picking on the Airlines Always Politically Profitable

Airlines are making billions from the baggage fees they started charging in 2005. In the last four years, they've raked in some $6 billion as I reported in The New York Times this spring. Now comes Senator Mary Landrieu of Louisiana with a plan that will mandate that airlines include one checked bag in the price of a ticket. The senator recognizes that there is a problem. Her solution, however is all wrong. 

While airlines are raking in money by the suitcase-full, they are sloughing off on passengers and the Transportation Security Administration, the burdensome consequences of bag fees. The TSA estimates checkpoint workers are inspecting 59 million more bags as people bring their luggage with them on the airplane.  

Once on board, passengers are fighting for overhead bin space. Flight attendants are left to mediate. Checked bag fees have had negative consequences for everyone except the airlines. 

But let's think about the airlines for just a minute. For an industry heavily reliant on oil, the check bag fee can be the difference between red and black ink on the balance sheet. And really, considering that on an airplane, weight equals fuel, what's wrong with an airline charging to move our stuff?

Now, just in time for the Thanksgiving holiday travel period, Sen. Landrieu is proposing an Airline Passenger Basics Act that would require airlines to accommodate one checked bag and one carry on bag in the ticket price. It would also require the airlines to provide unspecified "basic amenities".

When government starts telling private businesses what they can and cannot charge for, I think we are on a slippery slope. "The government deregulated aviation in 1978," said Steve Lott, a spokesman for the Air Transport Association. "Having the government dictate prices and services is a 30-year step backwards."

There's also something arbitrary about focusing on airlines. Last month I rented a car from Avis and before I drove off, I had to navigate through no less than seven ancillary-fee related services; from turning on the satellite car  radio to activating the tollway pass. Why is it okay for the government to tell airlines what they can charge while leaving other businesses alone? I put this question to Jay Sorensen, a guru on airline revenue who runs IdeaWorks, an aviation revenue consulting firm.

"What's next, the 'French Fry Act' which would require McDonald's to include an order fries with every hamburger?"  Jay asked, rhetorically. "Congress has no business legislating the price of services offered by a private company." 

On this, I think he's right.  But Landrieu has a valid point, too. 

TSA screening costs have increased by $260 million a year, the senator's office said in a press release.  "These additional costs are the direct result of airlines’ checked baggage fees and taxpayers are being forced to pick up the tab." 

To the extent that airline baggage fees  have impacted a government provided service, the airlines have some financial obligation.  Sen. Landrieu should be trying to figure out a way to re-capture from the airlines what their baggage fee decision has cost the rest of us, without legislating the way airlines provide services. Its doable, but requires something a little more thoughtful than playing to the highly excitable American air traveler




Anonymous said...

"...TSA screening costs have increased by $260 million a year, the senator's office said in a press release. 'These additional costs are the direct result of airlines’ checked baggage fees and taxpayers are being forced to pick up the tab'..."

But wait a minute. What am I missing here? Whether you check a bag or carry it through, either way it has to be screened.

Checked luggage undergoes explosives screening that, if anything, is more useful and cost-effective than the scanning of carry-on bags on the concourse. That TSA insists on obsessively rooting through our carry-ons for harmless pointy objects isn't the airlines' fault.

Patrick Smith

Christine Negroni said...

What you're missing is the fact that there has been no increase in the number of agents conducting the screening at the checkpoint - despite the fact that the number of bags these agents must check has increased by the millions.

As you point out checked luggage undergoes more useful and probably more effective screening than the cursory review at the security line. And yet, what the baggage fees have done is encourage more travelers to bring their bags right onto the airplane with them.

Julio Afonso said...

I agree with Christine,
And is really annoying that suite cases use more space, and funny is that we are not allowed to keep our jackets on our laps, how the hell are we supposed to accommodate all on the spaces available?
Reminds me of a recent flight where a family of 4 had the suitcases, plus Laptop cases and the jackets, and of course the "Lady" could not keep her laptop back under her seat, result?!?! guess who had to remove the laptop case and keep it under the seat? yours truly here.