Airlines cash in with peak-day surcharges

Travelers may pay as much as $60 more to fly domestically through the end of 2010 as airlines increase use of surcharges amid rising summer and holiday demand.

Round-trip surcharges of $20 to $60 are set for as many as 33 days still this year, or almost one out of every four, according to Tom Parsons, chief executive officer of Bestfares.com, and Graeme Wallace of FareCompare.com.

U.S. airlines are seeking to bolster earnings after posting their first collective quarterly profit in 2 ½ years, helped by a rebound in business travel, checked-bag fees and surcharges. Passengers often see surcharges as part of the fare and may not know why the ticket is priced higher, said Wallace.

"It's not transparent," said Wallace, chief technology officer at Dallas-based FareCompare.com. "If you're looking at travel on a particular day, you have no idea why it's $400 on that day. You don't know it's $340 the day before or $350 the day after."

More days with more fees

The extra fees are being charged Aug. 1 to Aug. 22; Sept. 2 and Sept. 3, the two days that precede Labor Day weekend; Nov. 19 to Nov. 29, which surround U.S. Thanksgiving, and Dec. 17 to Dec. 31, except for Christmas Day, according to Bestfares.com, based in Arlington, Texas.

Airlines traditionally have boosted fares on peak demand days, said Trebor Banstetter, a spokesman for Delta. Many carriers switched to surcharges last year as newer computer systems and pricing rules allowed the extra amount to be added on certain days without altering the base fare. The process is simpler than raising millions of base prices on each of the fare levels normally sold.

"This is a less cumbersome fare to file and monitor administratively when the filing involves a relatively small number of fares and specific dates," said Tim Smith, a spokesman for American.

However, to find surcharges, a passenger must generally look up the total ticket price on an airline's website, click on a "Fare Rules" link and scroll down through the text for specifics.

Low-fare carriers Southwest Airlines, JetBlue Airways and Virgin America don't use the peak-day surcharges, Parsons said.

Counting all of August, there are 49 days with surcharges in the five months through Dec. 31, according to Bestfares.com. That compares with 41 days in the six months from Nov. 17, 2009, when carriers first began using the surcharges, to May 28, 2010.

Carriers also stepped up the use of surcharges this spring and summer, applying them on 19 days in March and most days from June 15 to Aug. 22, Parsons said.

Fall fares and sales

Fall fares are higher than a year ago, although they remain below 2008 levels, said Genevieve Shaw Brown, senior editor at Travelocity.com. An average domestic round-trip ticket costs $320, compared with $284 in 2009, she said. An average international round-trip fare is $769, up from $643, Brown said.

Carriers are likely to have fare sales to help boost demand during the traditionally slow travel period in September and October, after school resumes, she said.

For the holidays, Nov. 22 and Nov. 26 will probably have the lowest fares for a Thanksgiving trip, with Dec. 21 and Dec. 28 best for Christmas, Parsons said.