What the Unbundling of Airline Fees Means for Your Wallet

US News

Last year, the United States Department of Transportation began requiring airlines to include government taxes and other mandatory fees in their advertised fares. Optional fees, however, are a different story. If you booked an airline ticket with a U.S. carrier this summer, you likely noticed a slew of relatively new fee options covering everything from checked bags to assigned seating.

Alaska Airlines recently announced price increases for checked bag and ticket change fees. Earlier this year, four major U.S. carriers - United, American, US Airways and Delta - raised the fee for changing a domestic flight from $150 to $200.

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If you're flying internationally, the pricing gets even more complicated. Earlier this year, Samoa Airlines announced it would base ticket prices on the weight of passengers and their bags. Irish budget airline Ryanair charges customers for activities like paying with a credit card and checking in at the airport instead of online. Many international airlines also charge a fuel surcharge to passengers cashing in miles for a ticket.

Ryanair and Spirit Airlines (a U.S.-based carrier that charges passengers for overheads) are often at the forefront of new fees, according to Chris Lopinto, president and co-founder of ExpertFlyer.com, a website that helps frequent flyers monitor their flight awards and upgrades. Watching those airlines can offer a glimpse of the fees other carriers may implement in the future, he adds.

Some argue that this "unbundling" of fees benefits both the airline and the consumers. "I realize that people feel nickel-and-dimed when asked to pay a surcharge for checked luggage, onboard food or a reservation change, but in a lot of ways, unbundling is a smart idea," says Patrick Smith, an airline pilot and author of "Cockpit Confidential." "It allows certain passengers to purchase ancillary items that not everybody wants, absorbing a higher share of the cost. This helps keep the overall price down, and these ancillaries were never 'free.' They were included in the price of your ticket, and that price was once a lot higher."

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In February, The Atlantic analyzed data from trade organization Airlines for America and found that when factoring in inflation and ancillary fees, average round-trip ticket prices have in fact dropped since 1979.

If you want to avoid extra fees, Lopinto says it takes careful research and planning to understand all the details before you book a ticket. "You're seeing some of the newer crop of metasearch sites that try to take new fees into account," he adds. RouteHappy.com, for instance, lets you browse flights based on factors like more spacious seats or the availability of in-flight entertainment.

Some of these optional fees might be worth the extra expense if you place a premium on comfort or convenience. Here's a look at a few of those options.

Fourth class. Several long-haul carriers offer an alternative to coach called fourth class, which is typically a premium-economy cabin located between business class and traditional coach. British Airways was the first to offer fourth class, according to Ryan Lile, who runs a consulting firm in Portland, Ore. called The Savvy Traveler. Other airlines, including Cathay Pacific, Air New Zealand and Air France, have since followed suit.

"It's still economy, but you've got one or two fewer seats across on the wide jumbo jets and a little bit more recline," Lile says. "The service would be a little bit better, and it could be little bit quieter." However, the main allure of fourth class, according to Lile, is that since the fares are higher than coach (the price difference depends on the flight and airline), fourth-class passengers have a greater likelihood of getting upgraded to business class if desired.

Seat selection. While choosing your seat used to be part of the booking process, an assigned seat is now a perk with an extra fee attached on many airlines. "It's harder and harder to book a seat reservation if you're a no-status traveler," Lile says. "They're trying to generate incremental revenue by charging for things that used to be free."

[Read: America's Meanest Airlines: 2013.]

According to Lopinto, most window or aisle seats now have a seat assigned fee attached that can range from $20 to $100 depending on the airline and length of the flight. For passengers who don't want to find themselves wedged into a middle seat on a flight, ExpertFlyer offers free seat alerts. "We'll let you know if a better window or aisle seat comes available that you don't have to pay for," Lopinto says.

In most cases, passengers who don't pay for a seat assignment simply get assigned a seat at the airport once they check in. But in cases when a flight is oversold, passengers without a seat assignment may get involuntarily bumped.

Extra space. Several airlines now promote the availability of roomier seats for passengers who want to pay for one. On Air New Zealand, for instance, the Economy Skycouch is available on some long-haul flights and gives passengers the option to book a row of three seats to turn into a bed or use to curl up with children or a significant other.

Sometimes extra space and other perks like priority boarding are bundled together for one fee. For example, American Airlines offers Main Cabin Extra, which includes priority boarding and up to 6 inches of extra legroom. Passengers who pay for Even More Space seats on JetBlue get at least 8 inches of legroom, early boarding and early access to overhead bin space.

"Usually during the booking process, if you're a non-status member, you often see an offer to pay X dollars for priority lines, priority check-in and priority boarding," Lile says. Even if you don't have elite status with an airline, Lile adds that you can "simply buy your way in."



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