United Airlines’ Curious Math

September 16th, 2008 | 8:04 am | Posted in Current Events | 3 Comments »

United AirlinesFound this great post by Jeanne Leblanc this morning:

United Airlines just doubled its fee for a second checked bag to $50, noting that “fuel prices continue to be volatile.” Which is true. Fuel prices have been going down. In a volatile manner.

The press release points out that fuel prices are “more than 50 percent higher than last year.” True again, sort of. As far as it goes.

There’s another way of crunching the numbers. The price of jet fuel has dropped 22 percent in the last two months. Crude oil has dropped by more than 33 percent. Some foreign airlines are cutting their fuel surcharges.

So doesn’t it seem like an odd time to blame fuel prices for fee increases?

And even if fuel prices were rising, the logical approach would be to increase fares along with luggage fees. It takes fuel to transport passengers, too.

But logic is not what’s at play, and it’s at least a little bit disingenuous to suggest anything so straightforward as a direct correlation between fuel prices and fees.

Market forces are the real issue, and with competitive pressures keeping fares down, airlines are in a tough spot. Fees on economy class passengers are among the few things they can work with.

3 Responses to “United Airlines’ Curious Math”

  1. Tony Pruitt Says:
    September 16th, 2008 at 11:49 am

    It’s pretty obvious to me. They don’t want you taking a second bag. If you absolutely have to take a second bag, you will pay for it. 2nd bags weigh down the plane and use more fuel. Even though fuel is down lately, the airlines are still not making money at current fare levels.

    Also, 2nd bags double the amount of bags they need to handle on the ground meaning double the chance of losing your bag meaning they will need to compensate you for it somehow.

  2. Heather Says:
    September 16th, 2008 at 3:37 pm

    Between the loss of travellers after 9-11 and the lull during the gas price increase due to increased prices to fly… even in better economic times they have to keep trying to make up for their losses somehow!

    If you stop and think about it, many people would be inclined to avoid United and American simply because of the relationship to 9-11 – even tho the company had nothing to do with it. Sad, but true!

  3. Brainy Smurf Says:
    September 16th, 2008 at 6:16 pm

    I only posted it because I find it truly funny how she points out that they blame the high cost of fuel because, well, just because it’s the trendy thing to blame higher fees on right now… even though the cost of fuel has actually been declining for months…

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