Bryan Clapper: Let the free market punish airlinesPublished 11:37am Monday, April 19, 2010
I’ve never flown Spirit, and doubt I ever will, because they don’t fly anywhere I need to go.
If someday I need to fly direct from Ft. Lauderdale to Nicaragua, though, I’ll just pick an airline that doesn’t charge me for my carry-on.
I can see the senators’ concern – that one airline doing it might lead to others – but they’re missing a pretty important point: People don’t like extra fees. And the free market punishes companies who do things that people don’t like.
If you find the current $35-50 checked luggage fees on most major airlines outrageous, fly an airline that doesn’t charge the fees.
Southwest Airlines, which I otherwise loathe, has built a multi-million-dollar marketing campaign around the fact that bags fly free with them.
It seems to be working, too, as every time I walk past a Southwest gate at Chicago-Midway it’s overflowing with people waiting to be herded on a plane like cattle.
Meanwhile, those of us who still don’t mind paying checked luggage fees (or who carry on their bag) usually have half a dozen extra seats around us on Delta.
I’m a frequent flyer, and I’m not a fan of all of the additional fees that airlines have tacked on now.
However, I don’t think it’s the best use of our government’s time to tackle issues that the free market can take care of.
In the long run, when government gets involved, it typically ends up costing everyone more.
Let’s say, for example, that the senators are successful in regulating what fees airlines can charge by making everything – not just the airfare – taxable.
Currently, airlines only pay taxes on the actual tickets, not the additional fees, so they benefit from charging more in fees, rather than raising ticket prices.
They’ll start by regulating carry-on fees, and then move on to others – that’s just the way government works.
If everything is made taxable, those $45 carry-on fees won’t just magically disappear – they’ll reappear on the cost of your ticket.
And every customer will be charged that additional $45, regardless of whether you have a carry-on or not.
At least under the current system those of us who can fit everything into a backpack and shove it under the seat in front of us (which won’t be hit with a fee under Spirit’s policy) wouldn’t have to pay the additional money. But wait, there’s more, because it won’t just be $45.
If that $45 is now taxable at 7.5 percent like the tickets are, it will actually be closer to $48, so that the airlines will still “make” $45 on it.
The additional fees travelers are being charged are not a result of airlines being “greedy” – after all, the big airlines had profit margins of less than 2 percent in the last quarter of last year, and that was an increase, thanks in part to collecting millions in additional fees.
That means if you spent $326 to fly on Delta roundtrip from South Bend to Orlando, that “greedy” airline just made a hefty profit of less than $7.
Would you drive me to Disney World and back in exchange for gas and a pack of cigarettes?
And can I borrow your pillow, have a bag of peanuts and complain when we’re five minutes late?
There continues to be a great myth that our elected officials will somehow magically “fix” things for us, that they’ll make our lives simpler and less expensive. It just isn’t true.
Everything has a cost, and every change has its consequences.
Bryan Clapper is publisher of the Dowagiac Daily News.
E-mail him at firstname.lastname@example.org.