A few weeks ago, I explained how Burger King makes a 240% profit when you say "Yes" to a seemingly innocent question. I later explained how other companies use sneaky pricing to charge you more while leaving a smile on your face.
Well, I thought I'd heard it all when it comes to creative pricing, but according to the Wall Street Journal, the airlines are charging hundreds of dollars extra for tickets in a way that leaves most people thinking they're simply paying taxes.
Here's the deal. Let's suppose you're buying a ticket online. You pick the lowest price. When you go to pay, there's an upcharge usually labeled something like "taxes and fees." Those fees often run into hundreds of dollars. Even if you're using your frequent flyer miles.
Well, it turns out that much of the time the "fees" include, along with taxes and airport fees, a "carrier fee" which is basically whatever the airline thinks you'll swallow without digging around the website for the breakdown of the upcharge.
This is very similar to how Burger King gets an extra $.50 for the slice of cheese on a Whopper by hiding the upcharge in the total price. In the case of the airlines, though, we're not talking about $.50 because the extra charges can easily run into hundreds of dollars.
What's particularly brilliant (and nefarious) is how the airlines position the extra charge (implicitly or explicitly) as a tax. That way, rather than blame the airline for lying about the ticket price, customers are more likely to blame the government.
That's an effective strategy in the United States, where unscrupulous politicians have convinced many not-very-bright people that the US has high taxes. It's even more effective in countries that actually have high taxes.
Not surprisingly, the airlines don't want to talk about these extra charges, especialy to the press. The WSJ article cites the various airlines' PR folk trotting out a series of amusingly obtuse, weasel-word explanations for the hidden upcharge.
In a related matter, Lonely Planet discovered that airline food is, in general, fresher than the food you can buy at the airport. I'm not sure it's worth an extra $300, but whatever.