Airlines are shifting their focus from fees as penalties to fees for enhancements, reports Scott Mayerowitz in an Associated Press dispatch (9/30/13). Where "the first generation of charges … dinged fliers for once-free services like checking a bag, these new fees promise a taste of the good life, or at least a more civil flight." For example, airlines "are now renting Apple iPads preloaded with movies, selling hot first-class meals in coach … Once on the ground, they can skip baggage claim, having their luggage delivered directly to their home or office."
The airlines also "will soon be able to use past behavior to target fliers." For the moment, such data is mainly "used to win back passengers after their flight is delayed or luggage is lost," but this is changing. "We have massive amounts of data," says Delta CEO Richard Anderson. "We know who you are. We know what your history has been on the airline. We can customize our offerings." In addition, airlines increasingly can "sell products directly to passengers at booking, in follow-up emails as trips approach, at check-in and on mobile phones minutes before boarding."
Fees are critical to airline profitability as "most fares today don’t cover the cost of flying. While the average domestic round trip base fare has climbed three percent over the past decade to $361.95, when adjusted for inflation, the price of jet fuel has nearly tripled." Because the fees "aren’t directly related to transporting passengers, they aren’t subject to the 7.5% excise tax travelers pay on base fares … Without the fees, experts say fares would be 15% higher." Meanwhlie, "civility fees" imposed by United Airlines helped it "increase fee revenue by 13% this year to more than $20 per one-way passenger."