In recent years, it seems like airlines have been adding all kinds of fees. The drive for additional revenue continues on!
In the past, we’ve seen different airlines start charging for fees. We’ve even discussed how one airline offered early boarding privileges for a fee, which is something that doesn’t resonate with me though I realize it might work for others. Now comes a plan by a different airline, United, which gives people the opportunity to subscribe to 2 different programs: a year of checked bags, and seats with more legroom
Well, it’s hard to blame them too much, especially those of us that suggest diversification of income in our own lives. Getting income from different revenue streams isn’t a bad thing for people or businesses. There must be a market for this, one would think.
Per this article on CNN Money the baggage subscription apparently allows for one checked bag per flight, for an annual fee of $349. Two checked bags would be $399. This would be good on trips through the mainland U.S. and Canada. If it typically costs $25 to check one bag, that’s 14 flights to reach a break-even point. In other words, 7 round trips. If a person checks 2 bags, that would turn into a better deal – but I don’t know too many people who check two bags on a trip multiple times through the year! There are also provisions for additional travelers.
Still, I can see how this might be a good deal for some folks. If a person does a lot of traveling, it might be worth it. Or, if you’re not directly paying for this but somebody else is, it might be worth doing it! Of course, I inadvertently found a way to get a free checked bag on a flight years ago, so I’ve gotten someone else to pay in a different way 🙂
The legroom thing, I’m not so sure about. This one is apparently $499 for an “Economy Plus” subscription, which gets you seats with more legroom. Again, if someone else is paying and money’s no object, that’s one thing. But on my own dime, I can deal with less legroom on a large number of flights instead of shelling out this kind of money. I’m sure it might be worth it for some people though.
This is no rant on crazy airline fees, as these two seem purely optional. I don’t find them to be a fit for me, but they could work for some others I’m sure. What’s interesting is how airlines seem to be coming up with all these different ways to generate some revenue beyond just airfare.
Personally, I’m all about getting the lowest fare possible – as long as it doesn’t involve horrible fight times. Being overly comfortable isn’t something worth paying for, at least for me. I’d tolerate less legroom if it could save me money. That $499, if invested and earning a good rate of return, could be worth a lot more years down the line!
My Questions for You
What are your thoughts on these programs?
Would you find it worthwhile to get extra legroom or a checked bag, for an annual fee?
Might be useful for those who travel frequently. I don’t see myself subscribing. Travel in the US via air is stressful as it is.
I don’t see myself subscribing either, though it’s interesting how others might find it compelling.
This is probably worthwhile for those power travelers out there. If you’re going to spend a sizable portion of your life, might as well pay a bit extra to make the experience more enjoyable.
MFIJ – I can see how it would be worth it for someone doing a ton of travel, as your costs get spread out. If someone else is paying, it’s even better!
I think it has the potential to be beneficial if you travel enough to make it worth it for you. I would like the extra leg room as I am tall but do not travel nearly enough to do it. I think it’s just a sign of the times that they’re doing this and expect more things like this to follow.
I think you’re right, sign of the times.
United’s new subscription program I think is mainly, like mileage programs, a way to get flyers to choose United. Once you’ve invested in that subscription, you’ll want to take advantage of it!
My understanding is that one reason airlines are migrating to revenue sources other than fares is that keeping fares low elevates the airline in search results sorted by price on travel sites. Pretty clever.
I wouldn’t pay extra for anything–airfare alone is close to busting my budget!
Kurt – I know what you mean about airfare being a budget buster. It’s not cheap, at least from my perspective. When add-on costs are factored in, it’s even more pricey.
I think this is geared to frequent travelers. Let’s see how this goes, but it seems it is good marketing for the airline. More upfront cash flow too.
krantcents – I think it might be an okay move for them. One would think that the market research has been done, and a market has been identified for this.
I suspect Kurt is right: United rolled this out not just to generate a one-time revenue source from the cost of the program, but to ensure that flyers will continue to purchase tickets on United. FF programs cost nothing to the consumer to join, and the “payback” period is often a long time away. Yet if you plunk down that $350 for the baggage fee or $500 for the extra legroom, then you have created a sunk cost which increases the incentive for you to book all of your flights on United for the rest of the year.
Personally, while I enjoy the extra legroom of United Economy Plus I rarely pay for it. I like to fly with a carry on only, so it doesn’t work in my favor to be in a later boarding group. Those seats with more leg room are always near the front of the Economy section, and while people with FF status get to board early and sit in those seats, the poor schmo who paid extra for the seat has to wait to board. (Ask me how I know! I will never fall for that trick again!) Later boarding pretty much guarantees that my carry on bag will have to get gate checked.
Now, if you like checking your bag this can really work in your favor. You get a seat with more legroom AND a free checked bag for one extra fee! (Provided your carry one bag meets the standard size guidelines and can make it through security to the gate, that is.)
Interesting on how FF status could impact boarding despite paying for the seat. Thanks for pointing that out.
I see it your way too, in that I like to fly with a carry on.
They’ve further monetized the early boarding option by making that available…for an extra cost, of course! One can purchase an Economy Plus seat with more leg room for an extra $30 for most flights, PLUS pay an extra $18 for early boarding. So, for nearly $50 extra per ticket, you can sit in a seat with more legroom and board early.
If you bought the yearly access to Economy Plus seats option, you’d still have to pay extra to board early so you could stow your carry on in the overhead bin and then stretch out to enjoy the flight.
I would never do anything like that myself but I could see how people who fly every other week could make out like bandits using that subscription service.
That’d be fine for business travelers, but I can’t see why anyone else would want to pay an annual fee. I’ve never paid to check a bag because I always travel super light. Hopefully they won’t start charging for carry ons.