Airlines roll out new fee hikes for passengers

This is a rush transcript from "Your World," May 2, 2013. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right, we are patted down. We are packed in. And we are shelling out. And now another fee just went up. You hear about this one?

If you're flying Frontier, well, you better drink up. The airline is soon going to charge some fares, $1.99 for soda and coffee, and if you didn't book directly with them, forget the soda and coffee. You're going be slapped a carry-on fee too, up to 100 smackers.

I have told you people and you refuse to listen. Fly commando. Until they start charging for particles of clothing, you're safe.

But aviation consultant Michael Boyd says there are other alternatives. Anyway, he says this is part of the new frontier.

Michael, what do you make of this?


Well, Frontier is doing it for reason of getting people to book direct with their website, rather than go through something, another channel they have to pay for.

CAVUTO: Right.

BOYD: And that makes some sense, to some degree.

But it's getting to the point now where airlines can't make money unless they start charging these extra fees. So we have a choice. Either pay up for what we use or don't fly. And I think the airlines really don't care if you do or don't sometimes.

CAVUTO: But there's really no way to escape it. It used to be that if you had carry-on language or if you sat in coach, or whatever, you were by and large safe. Then they started breaking apart the coach section as to whether you were on an aisle, whether you had an extra inch of legroom, and, I don't know, whether you had brown hair or blonde hair, whether you're Italian American or you were -- then they started piling on. Then you couldn't escape it. Now it's past a joke.

BOYD: Well, let's keep in mind where we are today is very different than 20 years ago.

If you remember the frequent flyer programs...


BOYD: American has a frequent flyer program so that you would fly them, rather than fly TWA or Northwest or Braniff. If you get my drift, they're all gone. So, today, you fly on an airline a lot not to get a frequent flyer benefit, it's to get your union card. And if you don't fly them enough, your union card does not give that middle seat -- anything but a middle seat. You have to pay.

So, airlines are at the point now where they want your loyalty. And they demand it. And if you give it to them, you are going to be in a middle seat between two sumo wrestlers.

CAVUTO: Not that that is necessarily awful.

But you know what I wonder, Michael? Why can't we -- and I know this is probably a dumb question as I'm thinking it's a dumb question -- simplify pricing? In other words, whatever is the price listed in the price of items, even if it's going to be a little extra more than you see in traditional advertised prices. This is the real price to get from New York to Miami, to get to Miami to L.A., whatever. This is the real price because we're not going to nickel and dime you on all the other stuff.

Does the industry fear that that's too simple, that's too clear, and then people just jump for the low, low prices?

BOYD: Well, if they do it, they're going to have to rates the base fare, which means I am going to have to start paying probably the same rate as somebody who checks a bag. And I'm smart enough not to check a bag. I don't do that.


CAVUTO: Well, that won't do you any good, by the way, on Frontier.

BOYD: No, it won't.

CAVUTO: Just a news flash, but go ahead.

BOYD: But the other -- well, if you book on their website, you won't.

But the other challenge here is, back in the old days when Braniff went under, they had this dumb bulb idea of having one price. That's all there was to it. Well, all American Airlines had to do was just have one fair level that was 10 bucks lower and nobody flew Braniff. So that put the airline under. Brilliant move.


BOYD: The point is, we're in that kind of environment now where the consumer will go for the cheapest fare and then find out later, oh, I have got pay for my bag. OK, I will pay. So it's one of those issues we're not going to be able to get around. This is the way of life.


CAVUTO: Yes. They got you at the airport, right? They got you at that airport. You're ready to go. Let's say you're with -- especially a vacation. You're with the kids and everything else. Why is daddy putting up such a stink and now we're taking the bus? I guess you can't do that.

BOYD: Sure. When was the last time you saw an airline ever say, our service is better than theirs? They don't care.

CAVUTO: You know, that's a very good point. They don't. They don't brag about that.

Michael Boyd, thank you very, very much.

BOYD: Thank you, Neil.

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