Airlines Recoup High Fuel Costs With Fees

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Your next flight may be a bit more pricey. Airlines are trying to recoup the higher cost of fuel by passing extra expenses on to consumers.

Many of them are using what some consumer advocates call "hidden fees" to make up the difference.

U.S. Airways says they will start charging $2 for non-alcoholic drinks, including bottled water.

At American Airlines, you will pay $15 to check your bag and that's on top of a $25 fee they recently added for the second bag.

Other air carriers are also following suit.

"It's ridiculous, I mean, you having to pay for each extra bag," one passenger said. It's crazy."

"A lot of people are going to get to the airport, they're not going to know about these fees, and they're going to be blind-sided. That's never a good thing," Farecompare CEO Rick Seaney said.

Some fear the unintended consequence of such decisions.

For example, charging more for checking bags could lead people to pack more in their carry-on luggage and it would take that much longer for airport screeners to sift through those bags.

Airlines to Go Bankrupt?

Meanwhile, a new study says most of the major airlines will be bankrupt by next year if the price of fuel remains high.

The study commissioned by the Business Travel Coalition says the commercial aviation industry is "in full-blown crisis and heading toward a catastrophe."

"Over the long term, everybody says that these kinds of fuel costs just can't be sustained," said Trebor Banstetter, Fort Worth Star-Telegram aviation writer. "The industry isn't built to operate under these conditions."

Currently, oil priced at $140 a barrel costs the airlines $30 billion a year. With this high of a margin, the airlines may not be able to recover the costs from passengers.

"You can hit a point where if they raise the prices high enough, people will just stop flying," Banstetter said. "So there is a ceiling there, and the question is, 'When are you going to hit it?'"

However, not all the forecasts about the airline industry are so gloomy.  Some analysts are predicting that airlines could turn their businesses around in as little as a year or two.

Sources: The Associated Press, The Fort Worth Star-Telegram

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