Six Things to Know Before Buying That Cheap Air Ticket

It used to be the only surprise you would get when you showed up at the airport were Hare Krishnas. Not anymore.

With airfares at low levels not seen since Bush the Elder was vice president -- the average domestic fare this year slid to $109.68 -- these are the salad days for cost-conscious travelers, right? Yes, but the devil's in the details: Ailing U.S. airlines are jacking up those small-print fees and punitive costs.

"Business travelers aren't paying high fees anymore, with 88% of them flying on some kind of leisure fare," said David Stempler, president of the Air Travelers Association, a trade group representing traveler interests. "Some of them have been searching for loopholes, ways to use these discounted fares. But the airlines are tightening up to force business travelers to pay higher prices."

Over the past two weeks, airlines have released flurries of news releases outlining new fees and policy changes, causing widespread confusion. "I don't even know the policy anymore. We've been told three different things," said an exasperated US Airways service agent at New York's LaGuardia Airport, as she attempted to explain the carrier's new standby policy. "How a passenger could know what's going on is beyond me."

Putting aside any lingering fears about post-Sept. 11 air travel, air passengers face new realities in the coming months. Before you snap up that cheap ticket, here are the six things you need to know.

1. Don't Miss Your Flight

This one has created the most headlines, caused the most confusion and drawn the ire of travelers. Two weeks ago, led by US Airways(U Quote), a slew of major airlines changed ticketing policy, refusing to allow customers who miss flights to trade in the value of their nonrefundable ticket for another one, starting Jan. 1.

In addition to the nonrefundable restrictions, US Air, UAL Corp.'s(UAL Quote) United, AMR Corp.'s(AMR Quote) American, Continental(CAL Quote), Delta(DAL Quote) and Northwest(NWA Quote) will charge $100 to get on a standby list, $100 to change your domestic flight itinerary and $200 to change your international itinerary.

"They're recasting unilaterally the bargain with customers," said Dr. Martin Staniland, professor in the Graduate School of Public and International Affairs at the University of Pittsburgh. "There's a certain amount of punishing all passengers with this policy."

During the recession a decade ago, airlines changed their ticketing policies to allow customers who miss their flights to exchange their ticket for another one on a different flight. Business travelers have been using this feature to avoid paying for expensive business class tickets, opting for nonrefundable cheap seats they can trade in later.

Now, if you miss your flight, that nonrefundable ticket is worthless. Most airlines have a "flat tire" rule, which means that if you're two hours late for the flight, you can still trade it in, but don't even think about showing up the next day and expecting a refund -- as some business travelers were doing. Some airlines, like Southwest(LUV Quote), will still allow you to miss a flight and use your ticket value toward a new one.

Make sure you ask your travel agent, or look closely at the fine print.

2. Fewer Flights, Higher Fares

With analyst reports saying August airline revenue trends were weak, the pressure to cut costs is growing. This autumn, traditionally a weak time for the airline industry, carriers plan to reduce the number of flights like never before -- a pinch you'll feel at the airport.

Nearly every major airline has announced (or plans to) big cutbacks in service, which will result in longer lines and layovers with fewer discounts.

"You may not see a change in fares, initially. But there could be fewer discount seats available in the network," said Stempler, who adds that travelers will need to work hard and act fast to secure cheap seats in the months ahead.

Forget about bargains -- some people who live near medium-sized cities will find it more difficult to find a flight. "Airlines cut service along less profitable routes. We would expect to see service to smaller and medium [cities] suffer the most," Stempler said.

3. Taxes

That Web fare may seem like a great deal, but your elation may turn to sticker shock once you factor in taxes, which have increased over the past year. According to the Air Transport Association, $51 of the cost of a $200 ticket now goes toward taxes, up from $29 five years ago.

To cover the need for increased security after Sept. 11, the federal government now levies an airport security fee of $2.50 per flight segment, which can add up to $10 to a round-trip ticket price. And it could go higher in the coming months. Washington legislators, hearing airline industry complaints that they won't be able to beef up security in time to meet deadlines, are considering doubling the tax to $5 per segment, with a maximum charge of $20.

The Tax Man Flyeth In July 1997, the average domestic fare was $125, with 15% of the cost of a $200 ticket used to cover taxes. Flash forward five years and the average domestic fares are $15 cheaper, but taxes account for 26% of a $200 ticket.
Tax/Fee	1997	2002
Domestic Passenger Ticket Tax	10.0%	7.5%
Domestic Flight Segment Tax	None	$3 per segment, $12 maximum
Passenger Security Surcharge	None	$2.50 per segment, $10 maximum
Passenger Facility Charge	$3	$4.50 per segment, $18 maximum
International Departure Tax	$6	$13.20
International Arrival Tax	None	$13.20
INS User Fee	$6	$7
Customs User Fee	$6.50	$5
Source: Air Transport Association, U.S. Tax Code

But that's not the only tax increase. Travelers will pay a $3 federal domestic flight segment fee on each leg of a round-trip flight, up from the $1 charged previously. And many airports now charge $4.50 per flight segment capped at $18 per round-trip ticket, an increase from the $3 previously allowed. Boston, Denver and both of Chicago's airports levy departure fees to cover the cost of federally-approved improvement projects, such as new runways and terminals.

To save money, try to book nonstop flights, which have fewer flight segments and, therefore, fewer taxes.

4. Seniors, Kids and Pets Pay More

In July, America, Delta, US Air and Northwest nixed the 10% discount that senior citizens receive, while United raised the eligibility requirement to 65 from 62 and increased restrictions.

Other airlines, such as Southwest, which has senior fares 20% to 60% below full fares, continue to offer discounts to older Americans. But since these low-cost carriers fly fewer routes, finding a senior discount could be impossible in the months ahead.

Children will be more expensive, with United doubling the fee for unaccompanied kids on a one-way flight to $60 last fall. US Air now charges $40 for unaccompanied children on direct flights and nearly twice as much, $75, from connecting flights. While this can be costly, it's still not as expensive as buying a ticket for yourself and traveling with the child.

American Airlines and Delta recently raised the price to fly a pet in either the cabin or as baggage from $50 to $75. US Air now charges $100. And pet lovers who prefer sending their pooches by special pet-transportation firms will be shocked to find the price to fly them one-way can run into the hundreds of dollars, because of increased security costs.

5. Leave the Third Bag at Home

While travel is down 10% at Delta, and other carriers, over the last year, cargo is up 20%. With the increased cost of security, carriers will be cracking down on oversized bags, unwilling to give 200-pound golf bags a free pass into the cargo hold. Don't test the theory -- flight attendants with tape measures have been given orders to ensure total compliance.

As a result, you get two bags and that's it. In August, Northwest and Continental began charging an extra $80 for a third bag. Others are too. United charges $75, Alaska Air charges $50, and Delta charges $40. But there are also exceptions -- Airtran allows for a free third bag, as does Southwest. "There was always a rule about third bags and oversized luggage and they let it pass, now they can't afford to," Stempler said.

6. Kiss Your Paper Ticket Goodbye

Some people like the secure feeling of a folded cardboard ticket in their back pocket, but airline executives aren't on that list. To them, paper tickets are luxury airlines can no longer afford.

"Paper tickets have to be printed, mailed and audited. If they're lost, there's a whole lost ticketing process, then the reissuing of a new ticket. It's costly -- one of the ways airlines had been losing money," Stempler explains, adding that airlines can save as much as $3 per ticket using electronic means.

To recoup processing costs, Continental, United, American and Delta now charge $20 per paper ticket, doubled the fee levied a year earlier. Northwest and US Air charge $25. These fees will not only discourage the use of paper tickets but mark the first step on the path to a paperless industry.

While people who take connecting flights on different carriers will still need a paper ticket, thanks to the magic of interline e-ticketing, people with an e-ticket on Delta don't need a paper ticket to get on a connecting flight with United. Because of the technological advance, United plans to end use of paper tickets completely by 2003 with other carriers following suit.