Posts Tagged ‘Gotcha Capitalism’

Delta does it again, but why?

July 31, 2008

I wish someone could explain this to me. Delta Air Lines again has upped its fee for checking a second bag on domestic flights, from $25 to $50 each way. Of course, they’re blaming the cost of jet fuel. (Second bags on international flights remain free. For now.) Delta’s luggage fee is now the highest among the six biggest US carriers. (My darling Southwest Airlines doesn’t charge a thing for the second bag.)

This collection would now qualify for fees (from 2001 archive)

This suitcase collection would now qualify for fees (from 2001 archive)

So here’s what I don’t get. According to a Bloomberg News story, Delta reported that fewer than 20 percent of all passengers check a second bag and “declined to say” how much additional revenue the new fee will generate. But it can’t be all that much, right? Could it even come close to CEO Richard Anderson‘s current compensation package of $11.3 million, as reported in the Atlanta Journal-Constitution? Yes, that’s more than Eleven Million Dollars, or roughly 2.3 million second pieces of luggage. I know, small potatoes in the corporate world, right?

So why bother, what with all the bad press Delta has gotten from this announcement? Is it 1) We’ll take what we can get? 2) There’s no such thing as bad press? 3) We’re laying the groundwork for something? Now what would that something be?

Wessel's MBA (Master of Bicycling Activities)

Wessel's MBA (Master of Bicycling Activities) (Click to ENLARGE)

I don’t have an MBA, though Wessel does, and he doesn’t get it either. (Granted, his MBA is a Master of Bicycling Activities from the University of Okoboji in Milford, Iowa, so that doesn’t really reflect on his business acumen. But you should see his leg muscles!)

One of my favorite consumer books from last year was “Gotcha Capitalism: How Hidden Fees Rip You Off Every Day — And What you Can Do About it,” by Bob Sullivan. Well, I think Bob needs to write the sequel, “How ‘Fuel Fees’ Rip You Off Every Day,” and what they’re hiding.

Happy travels.