Simplifying Airline Fees for Business Travelers

Airlines and consumers are in a constant battle these days. As the companies add more fees, travelers get annoyed and try to dodge them. But another good column by Joe Sharkey reveals an important wrinkle in the ongoing war. Firms are becoming frustrated by the lack of transparency and complexity of the new fees, as they budget their business travel. The airlines had better solve this problem fast. They should take a broad approach. 

Here's Sharkey with the issue:

The Business Travel Coalition, a consulting group for corporate travel buyers, is releasing a survey on Tuesday showing that two-thirds of business travel purchasers often feel blindsided by fees at the airport, and say that fees make it difficult to budget. In a statement accompanying the survey, Paul Ruden, an executive with the American Society of Travel Agents, says that "comparing air travel costs without fee-transparency is like trying to read a book with half the pages torn out."

Why does this issue matter so much? Business travel has essentially been the savior of the airline industry. Without it, the airlines would be much worse-off. They can't afford to risk more firms forgoing the headaches associated with hidden air travel fees and opting for virtual meetings instead.

Sharkey says a few solutions have been suggested. The coalition calls for Congress to force better transparency. Another group, Association of Corporate Travel Executives likes keeping fees separate, but also wants more clarity. A la carte pricing allows firms to better control their travel costs, says the group.

What the airline industry needs is a robust solution. That would require two products. The first would provide a la carte pricing, but in an easy to compare format, so total cost can be better anticipated. For example, imagine if, when you search for flights on an airline website, it had a series of checkboxes including:

• Taxes
• Meal/Snack
• Carry-on Bag (less than 50 lbs.)
• Checked Bag
• Priority Seating
• Itinerary Change

And so on. If those looking to book travel anticipate any of those costs, then it can provide two prices. The first would be the base fare, and the other would consist of a range for the minimum and maximum price if those potential fees were added. Of course, it would also need a breakdown of those fees which were summed up to get that range, so the borrower could add or subtract them.

Of course, such a change would take some technology, but surely there are computer programmers who could quite easily develop a system like this. All you would need is the fee information from the airlines, which could then be easily added onto their base fares. If a savvy web designer wants to make some money, I would venture to say a website called "AirlineFeeDemystifier.com" that does precisely this would be quite popular. This would provide the transparency so sought after, and also simplify traveling for the businesses that want a broader price comparisons. Everybody wins, except for perhaps any airlines that want their fees to remain hidden. And they should lose.

Second, airlines should think about offering a "no-fee" ticket option. The purpose here would be to provide travelers who don't mind paying a little more money for a hassle-free experience. The ticket price for this option would include any imaginable fee, including over-sized baggage, premium coach seating and boarding, guaranteed carry-on, a checked bag, ticket change fee, etc. This would be a win-win situation. It would probably be common that the fees the consumer would have paid would have been less than the ticket price, but the relative ease of travel will make that premium worth it for some consumers.

This two-prong approach should satisfy pretty much everyone. You hate dealing with fees? Just buy a no-fee ticket. You want more power over pricing? Utilize the fee demystifying query next time you're looking for a flight. Airlines are known to be some of the best price discriminators out there, so it's surprising they're taking so long to get their fee pricing strategy right so to make them even more profitable.