Baggage fees? What’s next?

“Bathroom behavior is an example of inelastic demand.”
The price of fuel is killing the airlines. They are left with only two choices: “fee-for-all” or “free fall.”

The “fee-for-all” alternative is to charge for services that used to be free to contain the airline cost hemorrhaging. The “free fall” option would halve fuel costs by shutting off all engines mid-flight and coasting to a deadstick landing, as soon as the PR people come up with a more passenger-friendly term than “deadstick.”

The airline industry conducted extensive market research with focus groups of frequent fliers, occasional fliers and “you couldn’t pay me enough to get in one of those deathtraps” non-fliers (who, for the purpose of the airline’s next prospectus, will be referred to as “future fliers.”)

Surprisingly, it was a tight race between safety and pay toilets. Tipping the scales was the realization that half-fuel flights would be like riding a roller coaster: the screaming would start once the plane started down and continue until it was safely at the ramp. This would amount to 7 plus hours of yelling on the New York-Tokyo run, making it impossible to enjoy the soundtrack of “King Fu Panda.”

Once the decision was made to charge fees for previously free services, the airlines put on their thinking caps. They had already started charging fees for the major free services such as meals. To survive they would need to be creative and come up with a potpourri of smaller services to charge for.

The airlines were up to the task. There is nothing like the threat of imminent unemployment to motivate a group of previously fat and happy corporate executives. They even came up with an upscale term for what they were already doing: “a la carte pricing.” You think you are in a fancy French restaurant — until you look down at the tuna slamwich on your tray table.

Here are the fees you will be paying in the near future — some you probably expected and some you never saw coming:

* Luggage: Most airlines have already instituted a charge for a second checked bag and some airlines have announced charges for the first checked bag.
Insider Scoop: Expect by 2009 to pay for carry-ons though this fee will be disguised as a rental fee for storage: $10 for the overhead bin and $5 for the space under the seat in front of you.

* Entertainment: Passengers have been dodging around headset fees by plugging in their own earphones. Shortly you will have to buy a rubber “headset adapter” to avoid being shocked by the electric current now being wired into the seats.

* Seating preference: “The early booker gets the worm” was once the motto of frequent travelers. No more. Soon, if you want a window, an aisle or a little more legroom, you will be ponying up a few extra dollars for the privilege.
Insider Scoop: One airline is considering auctioning off seat preferences in the gate area before each flight. Management sees this as a way to raise even more revenue and to provide some excitement during the otherwise boring gate wait.

* Charging by the pound: This is one fee that makes economic sense. The heavier the plane, the more fuel is burned. Southwest already charges for two seats if you’re so large you cannot lower the armrest.

* Bathroom privileges: In the economic model of supply and demand, bathroom behavior is an example of inelastic demand. An aisle seat with extra legroom is a luxury. Having to go to the bathroom at 30,000 feet is a necessity. There is also the opportunity to have a tiered pricing structure for bathrooms depending upon … I’ll let your imagination take it from there.

Painful as they are, travel costs are not what bother me most because I have options. What I worry about is the resulting fee frenzy that will be kicked off by the airlines charging for what was once free.

I look around and I see the group of service providers who are most affected by rising costs and can do the least about reducing them: governments — state, local and federal.

What’s it worth to you to move to first place on the 911 phone queue when your house is on fire?
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