Where Did Airline Fees Come From, and How Did They Get So Bad?

Welcome back to Season 2 of Economics in Plain English...

Airline fees are an unstoppable menace, rising from $2.45 billion in 2008 to a mind-numbing $27 billion in add-ons around the world, according a new report from IdeaWorks Co. Where did they come from? How did they become utterly unavoidable?

Welcome to Season 2 of Economics in Plain English, our video explainer series. With our next batch, we're focusing on the history behind economic mysteries. Take fees, for example: In the 1960s, the airlines were regulated and practically nobody could afford to fly. But in the last few decades, the real cost of flying has fallen by 50 percent, even after you include the most annoying charges. Intense competition and the quiet power of comparison shopping online have devastated profits, and the airlines have turned to fees to rescue their business. Is this good news for price-sensitive shoppers, or bad news for repeatedly duped flyers? You tell us.

Have a question for Derek? Leave a comment or tweet #EconExplained. Watch previous episodes here.

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Never Tell People How Old They Look

Age discrimination affects us all. Who cares about youth? James Hamblin turns to his colleague Jeffrey Goldberg for advice.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Never Tell People How Old They Look

Age discrimination affects us all. James Hamblin turns to a colleague for advice.

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

Video

Pittsburgh: 'Better Than You Thought'

How Steel City became a bikeable, walkable paradise

Video

A Four-Dimensional Tour of Boston

In this groundbreaking video, time moves at multiple speeds within a single frame.

Video

Who Made Pop Music So Repetitive? You Did.

If pop music is too homogenous, that's because listeners want it that way.

More in Video

Just In