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Airlines may offer you a low base fare but when you add in all the extras you may find your ticket price is suddenly significantly higher. Airlines call it "unbundling." I look at why this is happening and where this trend is going.
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Your airline ticket used to be an
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all-inclusive thing covering seat
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booking, suitcases, carry-on luggage,
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meals, and other services. Now, thanks
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to unbundling, all those things once
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offered as part of your standard ticket
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are now extras. Even things like leg
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room, they're tacked on to the base
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price of the ticket if you purchase
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them.
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Basic economics 101. And as much as we
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don't necessarily like it, there's going
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to be somebody who says, "You know what?
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I don't need those extra amenities. I
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don't need to have a snack or uh a
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beverage on the plane if it's going to
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cost me an extra 20, 30, $50." In 1978,
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President Jimmy Carter signed a bill
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deregulating the airline industry, which
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meant airlines, not the Civil
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Aeronautics Board, could set ticket
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prices to be more competitive. Over the
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years, the changing business landscape,
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which includes unpredictable fuel
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prices, overall operational costs, and
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increased competition, have forced
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airlines to look for more ways to
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generate a profit. And that means more
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fees on tickets. Now, Southwest Airline
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joins that move, adding a new fee,
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forcing plus-size passengers to buy two
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seats. It's been a long-standing policy
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for 30 years in favor of the policy that
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is used by most of the other major
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carriers, which is that if you cannot
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fit within the two armrests for your
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seat, then you are required to buy
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another seat. Tired of being nickeled
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and dimed by other airlines.
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Is this your first flight?
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On Southwest Airlines, we don't charge
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fees for stuff that should be free.
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Southwest fees don't fly with us. For
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years, Southwest positioned itself as
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the airline that avoided junk fees and
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made a big deal out of the fact that
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bags flew free. Now, under pressure from
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investors to increase revenue streams,
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they are dumping those policies. When
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you've got free baggage, they're
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essentially pricing that into every
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ticket. So, it'll be interesting to see
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what happens with Southwest ticket
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prices, which on average tend to be
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amongst the lowest in the industry.
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Anyways,
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Southwest is also moving to charge fees
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for extra leg room on flights. That'll
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start in January of 2026. It's part of
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its transition to assigned seating.
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It'll create different fairs to upgrade
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your seats like standard, preferred, or
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extra leg room. You go online, you
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scroll and you scroll, you find this
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really cheap flight that's going where
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you're going and all of a sudden you
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start being being hit with all these
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fees and realize it's not going to be
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such a cheap flight.
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That's right. And unfortunately, pretty
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much every discount carrier has run into
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these issues. Everybody from Ryan Air to
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Spirit to Frontier, they've had these
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issues where a lot of customers or
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passengers get very upset about it. But
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on the flip side, many of them have
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loyal followings in terms of people.
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They're just looking to get from point A
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to point B as cheaply as possible.
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As airlines struggle to remain
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profitable, experts believe we'll see
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more consolidations and more fees. And
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invariably, that means somebody will try
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and step in to fill the void.
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I think the industry is primed for an
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industry leader right now. There
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probably is a better way to do things
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and and I'm hoping and as I think we all
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are that an airline comes in and is
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nuanced in its thinking and finds a way
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to continue to remain profitable while
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continuing to increase comfort and
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amenities for all of its passengers.
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Experts believe in the next 5 years or
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so, the industry will continue to add
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more and more premium ticket fees while
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consumers fight back by combining
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business and leisure into a single trip
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to save money on vacations. Working for
3:52
you, I'm the consumer guy, Steve.
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