Northwest, United Add Fees

Uncategorized August 25 2004 0 Comments

Northwest Airlines said yesterday that it will be adding a $5 fee to ticket booked over the phone, and a $10 fee to tickets purchased at the airport. In addition, it will add a $7.50 fee to travel agents (online and offline) who book tickets through a GDS (like Sabre—this is most travel agencies, though Orbitz does not use a GDS). Northwest has been VERY vocal with their annoyance over distribution costs over the years, going so far as to pull their inventory from Expedia a couple of years ago when they felt they were being overcharged by the online agency. Sabre, which represent a large number of US-based travel agents, has said in response they will, in essence, bury Northwest’s flights so agents can’t find them. The NY Times quotes ubiqitous “airfare expert” Terry Trippler as saying that he can’t understand how this will benefit consumers. The answer: this has absolutely nothing to do with benefitting consumers and everything to do with lowering costs. You think consumers benefit when Ticketmaster charges them exhorbitant fees? Of course not. Northwest is simply saying, if it costs us money to distribute this ticket, the passenger will have to pay for it.

Northwest is not the first airline to do this (though none of the article’s I’ve read have mentioned it). In a few European markets, SAS and KLM are using netfares—meaning they set their fares at a wholesale price and allow distributors (including their call centers and website) to mark the fares up to cover their costs. This doesn’t bother me at all.

What DOES bother me is United’s announcement that they will charge $15 for reward tickets booked over the phone. As anyone who has tried to make a mildly complicated reward ticket booking knows, you simply cannot do it online (I probably spent 50 hours on the phone last October getting business class reward seats to Sri Lanka. In the end, I got them, but it never would’ve happened online). This is especially egregious because people making these complicated bookings are likely United’s best customers (as they have the miles necessary for these types of trips). Nickel and diming them without providing an adequate online technology is petty and weak.

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