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Airlines Celebrate The Holidays (Hide Your Wallet)

I am looking forward to a solo drive this week from New York to Florida. Sure, I could get there faster by flying, as I often do, but I will be in a much better mood if I drive.

I can rant at considerable length about dirty, overcrowded cabins, balky online booking systems, unreliable schedules and foul (or absent) food. But if you have flown in the past decade or so, you know all about it. The experience is generally bad, and, on most airlines, it has been getting steadily worse.

It is the outright nastiness with which many large airlines treat their customers that amazes me. They strand passengers for hours on the tarmac. Bump them from overbooked flights. Charge extra for checking luggage on aircraft with hopelessly small overhead bins. Want to know what I like best about driving long distances? I can take my biggest suitcase, stuff it as full as I want, and throw it in the trunk, free. (My second favorite thing: I can predict my arrival time much more reliably than I can when I fly. My car is never grounded or overbooked.)

Now the airlines have another tool to make passengers feel abused and victimized: The “holiday surcharge.”

In late September, American and United airlines decided to tack a $10 surcharge onto fares for three notoriously busy travel days: Nov. 29, Jan. 2 and Jan. 3. Since then, the trend has exploded. The original $10 has doubled or tripled in many cases, and the number of days included has grown exponentially. Twelve out of 31 days in March now qualify for surcharges on Delta, Northwest and United. Tom Parsons, CEO of the discount travel site BestFares.com, said, “We have not 10 or 11 or 12 peak holidays, we've got 41.”

Prices have always been higher on busy days. That’s the law of supply and demand in action. There are a limited number of airline seats available on those days and hordes of people streaming into airports hoping to fly.

But the surcharges mask the higher cost. Prospective passengers may not discover the true price of a seat until they are already well into the reservation process. This is a simple case of bait and switch. Airlines improve their search rankings and tempt customers onto their Web sites with low advertised rates, always accompanied by the tiniest of asterisks, and then charge a different price altogether.

Some friends of the airline industry argue that substituting fees for fare increases is fairer to customers because it enables them to pay for only the services they use. Mike Boyd, an aviation analyst based in Evergreen, Colo., asked rhetorically, “I don't check my bag, why should I pay for your bag?”

This argument might fly for add-ons that apply to some customers and not others, like charges for checking bags or sitting in roomier seats. I could even come up with a few more: A charge for flying with a crying baby, a charge for eating pungent food on board, a charge for blowing your nose more than three times over the course of the flight. But, when it comes to the holiday surcharge, the argument doesn’t work. Everyone on a given flight is flying on the same day. There is, therefore, no reason not to simply quote a ticket price that is reasonable given the level of demand on that day.

Fortunately for everyone, some of the most frequent fliers are politicians. At Newark Liberty International Airport on Nov. 30—one of the new airline “holidays”— Sen. Robert Menendez, D-N.J., said that he would reintroduce legislation requiring airlines to provide customers with a clear breakdown of add-ons and fees.

“Trying to navigate through the different components in your airfare is like an airline pilot trying to land a plane in a thunderstorm without electronic instruments or a map," he said. "It's technically possible, but it sure isn't easy.”

Under Menendez’s proposed Clear Airfares Act of 2009, airline Web sites would be required to disclose all fees before having customers input their name and credit card information. The bill would also prohibit airlines from adding surcharges for “fuel,” unless the amount of the charge is actually related to the cost of fuel.

In the meantime, holiday travelers might want to consider taking the highways rather than skyways.

Or you might want to fly Southwest. They quote the price that most customers actually pay. You have to pack pretty unreasonably to trigger a baggage fee on Southwest.

We don't have any plans to match that holiday surcharge,” Southwest spokesman Chris Mainz said. In fact, while other airlines implemented their surcharges, the Dallas-based carrier offered a holiday fare sale on travel between Oct. 13 and Feb. 11.

What an odd way to celebrate the spirit of the season.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book Looking Ahead: Life, Family, Wealth and Business After 55.

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