Airlines surcharging holiday travel- can you avoid it?

This article is pretty long but worth the read.
Taken from the Independent Traveler published on 10/13/09

Just when you thought the airlines had exhausted every possible surcharge, they still manage to impress with their ability to reach into our pockets. This time, it is a $10 holiday travel surcharge on all seats on peak travel dates, reaching very nearly into summer. There is both good news and bad news to be found in these latest duns, and some hints on how to save money and avoid crowds this winter and holiday travel season.

American and United first floated the surcharge a few weeks ago, focusing on three peak holiday travel dates: November 29 (the Sunday after Thanksgiving), and January 2 and 3 (the Saturday and Sunday after New Year's, when everyone is going to be traveling to get back to work and school). US Airways soon followed suit, and when they were only mildly pilloried in the press, all of the other major airlines fell into line late last week, with the complete list now comprising American, Continental, Delta, Northwest, United and US Airways.

In the meantime, the list of affected dates ballooned from three to 13, to include November 29 and 30; December 19, 26 and 27; January 2 and 3; March 14, 20, 21 and 28; April 11; and May 28.

Southwest and JetBlue have not adopted the surcharge, and have given indications that they will not do so.

Why Not Just Raise Fares?
These are, of course, fare increases by any other name, but the airlines greatly prefer to levy them as surcharges for a couple strategic reasons. First of all, the airlines can hide the surcharges when promoting sale fares; laws governing truth in advertising allow the airlines to bury surcharge information in the fine print. So the airlines can advertise $39 sale fares as they did last week, but they don't have to mention the date-specific $10 in their headlines.

The airlines are pretty much shameless when it comes to this kind of thing. For example, according to Tim Smith of American, the surcharges "absolutely are not a fee." Ha. Even a kindergarten kid caught red-handed sneaking treats knows he can't get away with saying "this is not candy; it is a piece of caramel wrapped in chocolate."

Perhaps more significantly, the airlines get the $10 revenue on every seat sold, whether for first class, business class, coach, discount, name your price and so on -- every person is paying the extra $10. The $10 remains the same irrespective of what the sale price or the airline's yield management pricing system says the seat is worth. So even if they are advertising seats for $39, they know they're at least going to get the extra $10, even on the (very few) seats they sell at the advertised sale price.

On a peak travel day, that is a lot of "free" income. How much income? If we use AAA's number from last year, when they estimated that 4.5 million people would fly over the Thanksgiving weekend, and make the assumption that most of those folks will be flying home on Saturday the 29th or Sunday the 30th, you're talking about upwards of $45 million dollars in just two days.

And note that the surcharge is applied to the base fare each way, so they can literally get you coming and going.

The surcharge is likely here to stay. After all, last year's fuel surcharges never really went away completely, despite gas at the pump edging down close to $2/gallon these days. These surcharges will show up again next winter holiday season, and don't be surprised when peak summer travel dates are added to the list; the inclusion of May 28, the Friday before Memorial Day, is the proof. It's going to happen, folks.

Peak Travel Days, Holiday Season 2009 - 2010
At this point, I don't have to tell you which days will be the peak travel days -- the airlines have already done that for me. From the list of dates above, I predict that January 3 will be a particularly rough day this year. When January 1 falls on a Friday, as it does this winter, almost every business and many schools in America will resume "normal" hours on the first Monday morning after New Year's. Similarly, the workers and students on furlough will try to extract every last minute from their vacation time. Add to that the potential for some travel-hostile winter weather, and you have a perfect storm of travel volume and maxxed-out airports all day long on Sunday, January 3.

True to form, the airlines added January 2 to their surcharge calendar to snag the more sensible among us who avoid that last-minute Sunday crush. No one wants to travel on January 1, so if you are in good enough shape to board a plane on Friday morning, you should be able to get low fares without surcharges, and have a pretty smooth go of it as well.

As for Thanksgiving, consistent problems over the past several years (not to mention all the resulting media attention) have actually resulted in a change of behavior among the traveling public, where many have adjusted their travel schedules to avoid the peak days. People are traveling a little earlier in the week, and heading home either a little earlier or later than usual. As a result, the overall volume is much more spread out. I have several friends who damn the torpedoes and travel each year on the day before Thanksgiving, and all have had tales of short lines and uncongested airports to tell in recent years.

Folks may leave work on Tuesday or even Monday, and the day before Thanksgiving no longer seems to be the relentlessly nastiest travel day of the year. Similarly, travelers may head home earlier as well, perhaps on Friday morning, which is traditionally one of the lighter holiday travel days.

With Christmas falling on a Friday, the Christmas travel week could be horrendous. I had been hopeful that schools might let out on the 18th, which would make it among the easiest Christmas travel years possible; a full week between the end of school and Christmas day would help to spread out the volume nicely. But then I did an informal sample of a dozen universities and school districts, and all but two set the last day of school as December 23.

When that is the case, the business world often follows suit to some extent, which means that the entire country will be getting off work at lunchtime on Wednesday, December 23 and muscling their way to airports to be home in time for the holiday. I recommend you try to avoid being in that number.

The upside potential for folks who can travel earlier in the week, or even the previous week, is obvious: lower fares and empty airports could be all yours. My advice would be to plan to travel on or about the 21st of December. That way, folks who freed up and bolted to the airports on December 19 will already be long gone, and you'll avoid the December 23 onslaught entirely.

The Silver Lining
The peak travel surcharge is targeted toward family and vacation travelers; let's face it, there's not a lot of business travel happening on January 2. So the folks who give the airlines their business and create the environment that lets them jack fares up around the holidays will be ponying up even more.

However, there may be a hidden upside for leisure travelers in the trend toward surcharges: holiday travel is expected to be down considerably this year, and fares are down as well. At present, holiday fares are down 12 - 15 percent, according to FareCompare.com, who broke the surcharge story. The airlines are terrified that they are going to have to price fares extremely low on the peak holiday travel dates, and are trying to figure out another way to dip into your pockets with the surcharge gambit.

If you're not forced to travel on the peak travel dates, the silver lining is that you may be able to find some fantastic fares, even just a day or two off the most popular travel dates. Many fare-tracking experts believe that we won't see a lot of last-minute fare sales this year, and I tend to agree; in a round of tests, I found a large selection of very low fares on popular routes on popular travel days. I suspect that folks who are searching for holiday travel now will pounce on these fares, and there won't be as many discounted seats later on in the game.

Thus, my recommendation would be to choose your travel dates well -- and well in advance -- to get the best fares and flight times. It may be more risky in 2009 - 2010 than in recent years to try to wait it out until the last minute.

Best Fares
The airlines' list of peak travel dates is useful in at least one respect: it functions as a perfect roadmap of when not to travel, as the surcharge dates are also most likely to have the highest base fares as well. And if travel is down sufficiently that fares stay low even on the busiest days, the $10 may seem like a pittance in the end. My suggested travel dates for getting the best fares, avoiding the crowds and eluding the surcharges are as follows:
• November 23
• November 26
• November 27
• December 21
• December 25
• December 28
• January 1
• January 6
• January 9
And don't be afraid to check out the surcharge dates as well; a really cheap fare with $10 tacked on is still going to be very affordable. If the airlines scare everyone away by piling up the fees, they may have to lower the fares, and the thorough consumer will win in the end.