There's a reason that Warren Buffett exercises caution when expounding upon the thought of investing in the airline business: It's a capital-intensive business that provides razor-thin margins even during the best of times. Airlines have done what they can to counteract rising fuel costs by raising ticket prices, but in most cases, that simply hasn't been enough to keep them profitable.
Instead, every airline has turned to charging fees for various items from bags to food to bring in extra revenue. According to the U.S. Department of Transportation, baggage fees accounted for $3.4 billion in extra revenue in 2010 and $2.6 billion in added revenue through the first three quarters of 2011. It makes one wonder what they are going to charge for next.
Today, I want to share with you my list of what I consider to be the 10 most outlandish, dumbest fees you might face for flying the so-called friendly skies.
$450 bag fee for overweight bag: This monstrosity of a fee, courtesy of the bankrupt American Airlines, is incurred for checking in a bag weighing 71-100 pounds on Asian flights. For that price, I'm almost tempted to row the darn thing back to the U.S. myself.
$40 airport carry-on fee: Carry-on fees are all the rage now. Allegiant Air (NAS: ALGT) jumped on the bandwagon yesterday, indicating that it too would begin charging a fee later this week for bags larger than a purse or briefcase. But, this special fee is spearheaded by Spirit Airlines (NAS: SAVE) , which charges a staggering $30 for checking your bag online, $35 by phone, or $40 if you do it at the airport. I'm not so certain there's an entire $10 worth of added work by checking in your bag at the airport.
$5 boarding pass fee: Or as I like to refer to it, the "how lazy are you?" fee. Spirit Airlines instituted this lovely fee last year for those who want to have a Spirit representative print out their boarding passes for them rather than doing it themselves at home or at a kiosk in the airport.
$17-$25 pillow and blanket: It's true, this one isn't going to put you in the poor house, but Allegiant Air has found a way to add some extra revenue from the unconscious. Here's a charge that easily could be avoided by layering up and bringing your own pillow.
$3 water: Surprise, surprise... it's Spirit again. Spirit actually charges for soda and coffee as well, but what's truly interesting here is that the water costs $1 more than the coffee or soda. US Airways (NYS: LCC) began charging for similar items in 2008 but retracted the charge less than a year later.
$150-$200 change fee: Whatever flight you're booked on, make sure you stick to it on Hawaiian Holdings (NAS: HA) subsidiary Hawaiian Airlines. This airline will set you back $150-$200 if you dare make any travel changes to your flight.
$125 third bag fee/$200 each additional bag: Out of all the domestic airlines, Delta Air Lines $125 fee for a third bag ranks second behind only American's $150 charge. But, don't even think about bringing a fourth bag onto the plane here because any additional bags after the third will set you back $200 per bag!
$6.50-$16 for alcohol: I understand there's a premium to having your favorite wine on a plane, but for $16 you can buy an entire bottle, or perhaps a case of beer. This bountiful fee also belongs to our friends on the island, Hawaiian Airlines.
$175 pet fee: It makes you wonder: Does Hawaiian Airlines dislike pets that much? I'm not purposely piling onto Hawaiian Airlines, but they do indeed have some of the most ridiculous fees of this group. Better leave Fido at home on your next trip if you're using Hawaiian for flights not within Hawaii.
1 euro bathroom fee: OK, so were they serious about this one? Ireland-based Ryanair (NAS: RYAAY) was seriously tinkering with the idea of charging passengers for using the restroom on its flights of one-hour or less, but ultimately decided to drop the plans after a year of thought.
What sort of fees will they think of next? Use the comments section below and give it your best shot by telling your fellow Fools what outlandish fee we can expect from this industry next.
If razor-thin margins aren't your thing, consider getting your copy of The Motley Fool's latest special report on its "Top Stock for 2012." This high-growth stock could be just what you're looking for and you can find out its identity for free by clicking here!
At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. People always look at him funny when he yells, "Dee plane, Dee plane!" You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that dislikes outlandish fees.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.