Note to Congress: You Can Learn From Bag Fees
In the case of the U.S., the model remains flawed: costs exceed revenue. The solution here isn't any different than the one the airlines have pursued: Cut spending and raise revenue. None of this is popular -- not higher ticket prices, not higher taxes, not bag fees, not reduced health care spending. But options are limited.
Sub-committees of both the House and the Senate are studying bills that would force airlines to drop the fee for the first checked bag and would prohibit fees for carry-on bags. The latter restriction would apply to a single carrier, Spirit (SAVE - Get Report), which innovates by charging rock-bottom fares and subsidizing them with fees for the services travelers use. Does that really need to be illegal?
The bills are misguided. Fees are unpopular, but they create revenue. Revenue keeps businesses and countries afloat.
-- Written by Ted Reed in Charlotte, N.C.>To contact the writer of this article, click here: Ted Reed >To follow the writer on Twitter, go to http://twitter.com/tedreednc.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts