Why The Fare Is Not the Fare When You Book an Airline Ticket

Clark Howard | March 22nd, 2017

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In an era of more and more unbundling, the airlines are keeping fares low but feeing you to death for everything else!

I can’t believe the latest news about a bill before Congress called the Transparent Airfares Act. Yeah, right. What a bunch of garbage! The airlines are up to some Machiavellian and Orwellian stuff all in one with this one.

This is another attempt to do bait and switch where airlines advertise a fare that really doesn’t exist. The Transparent Airfares Act will do exactly the opposite of its name — give them immunity to essentially lie to you, get you hooked on a seemingly low fare, and then blindside you with much higher prices when you click to buy.

This says so much about the corruption in Washington where airlines want this bill passed through and they’re going to grease the right palms to get it done. But light needs to be shined on darkness.

The truth is airlines charges fares that are, by historical numbers, very good on average. Today’s airfares are a steal of a deal, even though they’ve been up over the last few years.

But that’s only part of the story. While the base fares are great, the add-on charges are what kill you: Fees for baggage, early boarding, food, everything. Yet the total cost matters and seeing what you’ll pay when you checkout is what you really need to know.

Yesterday I was in Los Angeles and I saw how the economics of fees plays out. I was flying Southwest and even though I don’t check a bag, you can check 2 bags for free. Boy, is that putting the hurt on their business model! The line to check a bag wound all the way thru LAX Terminal 1 out to the sidewalk and then down the sidewalk.

I suspect it won’t be long before Southwest reduces their offer from 2 free bags to 1 free bag.

Meanwhile, Frontier Air is going the opposite of Southwest. They’ve announced a new fare and fee structure. So you have these incredibly low fares, like flying halfway across the country for $29. But the carryon bag fee is $35 in some circumstances. It’s entirely possible to pay more for your bag than for the fare!

This kind of unbundling is key to how airline pricing works. You’ve got to know that the advertised fare is not necessarily the fare.

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This post was last modified on March 22, 2017 1:59 pm