Watch out, travelers. Airlines have a new profit plan: surcharges.
Late last month, AMR's
Why? Sean O'Neill, editor of the Budget Travel blog, says it best:
A surcharge is a lazy way to make sure airlines rake in big bucks this year. It's easier to slap a $10 surcharge onto every ticket than doing the complex calculations needed to raise prices by various amounts on thousands of routes ($8 more on one route, $18 on another, and so forth).
Keep in mind that unlike a fee, a surcharge isn't optional or avoidable. No airline employee -- no matter how friendly -- can reduce it. Common surcharges cover fuel, airport usage, and other operating expenses. They're sort of like the city and convenience taxes levied on you when you stay at a hotel.
So even if this airline-initiated surcharge isn't technically a fee -- or, more accurately, a fare hike -- it smells like one. Southwest Airlines
Simplicity is Southwest's competitive advantage as a carrier. Yet simplicity also makes this new surcharge attractive for all of its legacy competitors. Announce it, add a few lines to advertising fine print, and then start collecting the extra revenue.
Passengers won't like this profit plan. I can't blame them; a fare increase is still a fare increase, whatever the carriers call it. Yet this surcharge may be the most effective earnings-booster we've seen in years.
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Fool contributor Tim Beyers is a member of the market-beating Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy asks that you please stow your tray tables for takeoff.