Glad you asked.
Peak travel day surcharges are a way for airlines to raise money in a tough economic environment and they’re kind of ingenious in their simplicity.
First you have to understand that over the last year airline ticket prices were in free fall to historic lows, and the airlines haven’t had much luck raising airfares en masse – we leisure travelers quit buying and business travelers aren’t picking up the slack. Sure, bag fees are perking along, and they may bring in close to $2 billion this year, but it’s just not enough.
Face it, the airlines are hurting.
So if they can’t boost the price of all tickets, the airlines will settle for boosting the price of a lot of tickets – with surcharges. Trust me, the airlines have been studying our habits for years – they know which days we want to fly, so they release fewer cheap seats and now are slapping on targeted departure day surcharges on these most popular days to fly (or “peak travel days”) and this allows them to rake in an extra $20 to $60 per roundtrip ticket.
Here’s something you may not know: peak travel day surcharges are filed in the same fashion as fuel surcharges which were popular in 2008 when oil hit $140+ per barrel – and both are rolled into the price of your ticket and are baked into the quoted price. These are not charged separately like bag fees – which are an “extra” item, like trip insurance – something you choose to pay. There’s no choice involved with a surcharge – if you fly on a “surcharge day” you will pay the price.
Why should you care? Because peak travel days belong on any list of “most painful days to fly”. Keep reading, I’ll explain…
“So What Exactly ARE These ‘Peak Travel Day’ Surcharges, and Why Should I Care?”
I bet you’ve parked in one of the lots owned by Parking Co. of America.
It’s the largest operator of “off-site” airport parking in the U.S. – handling all those parking spaces at O’Hare, Denver, Atlanta and the “big three” in New York.
But in recent years, fewer fliers means fewer people taking up those 40,000 parking spaces in lots called SkyPark, FastTrack and Avistar — and the company has filed for bankruptcy and will be sold.
It all trickles down – from hurting airlines to empty lots to half-filled coffee shops to tipless Sky Caps. I know things will get better – but the waiting can be wearisome.
Big news for the airlines: the Internal Revenue Service says bag fees collected by U.S. carriers are not taxable.
That’s big news and great news since (per BusinessWeek) bag fees could add up to as much as $1.78 billion in badly needed revenue for the airlines this year.
In case you were wondering, the airlines do pay a sizeable amount of taxes in general: in 2009, their federal taxes and fees for airports, regulators and security added up to $16.6 billion.
Do you ever get such good news from the IRS? Wish I did…
With all this talk about rising bag fees and “peak travel day” surcharges, sometimes we lose sight of the obvious:
Airfares, on average, have been cheap.
And as proof, here are the latest figures from the Transportation Dept.’s Bureau of Transportation Statistics (BTS):
Average domestic airfares in the third quarter of 2009 fell more than 14% compared to the third quarter of 2008. That is the biggest year-to-year decline on record.
The news gets even better: the average third quarter airfare going all the way back to 1995 was $288 – while in 2009, that airfare was $306. So the average airfare got higher, right? Wrong. Let’s adjust for inflation – let’s convert that 2009 fare into “1995 dollars”: now the $306 price is equivalent to $217.
So in a 14 year period, the average airfare (at least in third quarter periods) has dropped almost 25%. Amazing.
Final note: I do realize that the third quarter results of last year represented the “bottom” of the prices and the direction has been on the northerly side since, but – have you checked out our Deals Blog lately – or signed up for FareCompare’s real-time alerts? You’ll see good deals…
Earlier this week I was perusing an interesting article in the New York Times about how some folks are “gaming the system” when it comes to bag fees (I actually posted on this topic late last summer).
But “gaming” is a subject made new again, thanks to the fact that so many airlines have just raised bag fees once again.
Two possible solutions (and I do not recommend the first one):
1.) Go to your gate and ask if you can check your carryon there – often the boarding process is so hectic that agents just say “yes” and won’t charge you (but note: sometimes they do)
2.) If you fly the same route often, you probably know which rows board first; book accordingly, so you get first dibs on the overhead bins before they fill up.
Question to my readers: Have you ever tried these methods? If so, how did it work out for you? And do you have any other tips or tricks you use to avoid bag fees or simply to have a stress-free flying experience? Drop a comment and let everyone know. And thanks.
If you’ll be jetting in for Super Bowl XLIV in Miami on Feb. 7, better get there before the FAA establishes its 10 mile Temporary Flight Restriction (TFR) around the Sun Life Stadium*.
This will be in effect from approximately 4pm until midnight EST (depending on when the Colts and Saints quit pummeling each other).
In case you’re keeping score of the aircraft, the FAA figures between Jan.22 and Feb. 8, there will be as many as 700 extra general aviation flights (for Super Bowl prep, the Pro Bowl and Super Bowl Sunday).
*Stadium: I know, I know – the proper name is Sun Life Stadium (or it has been since Jan. 18 – let me know if it’s changed) but the FAA in its wisdom called it “Dolphin Stadium” in its press release. Fans will recall that was its name from 2006-2009 and for a brief time this year (in 2005 it was known as Dolphins Stadium. And who can forget Joe Robbie?
FareCompare – we help you find the best deals ever – plus, SportsTalk!
UPDATE: Continental has added surcharge dates; Alaska is matching on their AA/DL codeshare flights only.
Last night, United Airlines added a bunch of “peak travel day” surcharges onto dates through the summer vacation season in June, July and August; these latest surcharges are $10 each-way.
Earlier (on Monday), Delta added new dates , and American joined on Tuesday. Note: Unlike a bag fee, the surcharge is not presented to the airfare purchaser as an “extra” cost; it is rolled into the price of the ticket.
To make it easy for everyone to see the precise dates – and costs – of all these surcharges, I’ve put together a Peak Travel Day Surcharge Calendar – and the calendar includes all months from February through August.
Take a look as you plot your escape to your next getaway with cheap flights from FareCompare -avoid the “surcharge” days and save yourself a buck or two.
The catch is, it helps to be “in love” – like the couple below – to really enjoy these new economy class seats from Air New Zealand. Face it, this is not exactly built for people who are “just friends” but – I like it.
And we will start seeing these “Kiwi-designed” seats – called Skycouch – later this year on Air New Zealand’s international service.
There is another catch to these seats: you and your traveling companion have to buy three seats (an entire row) to make this work. You see, the seats come with a sort of leg resting area (kind of like the bottom part of a La-Z-Boy) that pulls up flush with the seat bottoms, creating a flat space for you and a companion to lie down on (presumably with your heads toward the windows).
That third seat would cost about half-price, though I’m not sure what happens if the plane is full. Meanwhile, as Air New Zealand’s enthusiastic CEO Rob Fyfe says, “The dream is now a reality, one that you can even share with a travelling companion – just keep your clothes on thanks!”
Oh, those Kiwis…