What the Airlines Have Learned From Popular Retailers

Airlines are acting less like transportation companies and more like retailers.

March 22, 2013— -- People love Kohl's. The discount department store is always offering $10 off coupons or "Kohl's cash" or 80 percent off sales, whatever it takes to get you in the door. Now it seems the airlines are paying attention.

I'm thinking of a recent JetBlue sale ("Today Only! 20% Off!) and a special offer from Southwest that priced all flights at a hundred bucks or less (of course, prices were good for one day only, but still).

The point is, airlines are acting less like transportation companies and more like retailers, and that's a good thing - for them.

For more travelnews and insights view Rick's blog at farecompare.com

Back to Kohl's for a moment. As some local TV news reporters have discovered, the discount department store's prices are not static; they go up and down depending on when you buy.

The same is true for airfare. Say you buy an airline ticket on a weekend; you can pay a lot more than if you bought it on Tuesday, the cheapest day to shop. Another example of yo-yo pricing is flying during a peak travel period - say a Friday in high summer or the Wednesday before Thanksgiving - versus flying during a dead zone, like much of January.

So airlines are pricing both their core product and a new a la carte menu of optional fees (many of which used to be free or a perk of elite travelers only), much the same way a retailer would. This is something they couldn't do during the days before de-regulation and something they didn't dare do during the nightmare period beginning with 9/11 and continuing through the recession of just a few years ago. Now, things are a bit brighter and the airlines are taking advantage.

Do bag fees still stick in your craw? Too bad because they're here to stay. Look, I don't like fees either, but they are optional. Here's some perspective: American Airlines will carry your 50-pound checked bag for $25 one-way and it'll arrive with you (most of the time). Federal Express, on the other hand, will ship a 50-pound box for about $62, but you'll have to wait a few days. If you absolutely, positively have to have it overnight, FedEx will charge in the neighborhood of $300 and more.

I can hear it now: "At least I wouldn't have to hang around the baggage carousel with FedEx." But you don't have to do that with some of the airlines anymore, either, and United's new home delivery service charges only $29.95, which, on top of the regular checked-bag fee, still comes out cheaper than the FedEx ground rate. Cheaper and quicker.

But perhaps no airline fee makes people crazier than the "change fee" because it's expensive and because you're paying to change your mind. Again, get used to it. Ever hear of a restocking fee? The Consumerist website is filled with tales of woe from those who haven't but the bottom line is, the privilege of changing your mind can cost you whether you shop American Airlines or Amazon.

More and more high-end hotels are doing this, too: Cancel at the last minute (and even cancel weeks ahead of time at some high-end hotels) and you may be penalized to the tune of one night's stay. I recently perused the cancellation policy for a well-known San Francisco luxury palace where the penalty was more than $600 - that was the cost of a night in one of their cheaper rooms.

And what about those extras the airlines now charge us for? That's very businesslike, too. Just as Hertz is not going to let you borrow an infant seat for free (you'll pay about $20 per day depending on where you rent), that airline blanket, pillow and meal will cost you too. Sometimes even water costs money (I'm looking at you, Spirit Airlines). Extras equal revenue for any business no matter how you slice it.

It took a while, but the airlines are finally coming of age. Better that than a premature death because we need the airlines to survive. Flying is still the quickest and safest way to travel.

Now here's that silver lining: Flying can still be cheap. Say you want to go cross-country, about 2,600 miles, and you've got a car that gets 30 mpg. Let's say gas costs an average of $3.70 per gallon. It'll cost you about $320 to drive those 2,600 miles, but we'll throw in a couple of nights at a cheap motel and call it $460 total.

Take the same trip on a plane this spring and it'll only cost you $360. Oh, and that's the round-trip fare, so you'll go across the country - and back!

Airlines are businesses, but remember, most businesses still offer deals from time to time. An employee of mine told me she recently used a bunch of Kohl's coupons to buy a $50 pair of Levis for less than ten bucks. You can still find great deals on airfare too, if you know how to shop and know when to buy.

The opinions expressed by Rick Seaney are his alone and not those of ABC News.

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