Helped by falling oil prices, airlines are reporting record profits. But for many passengers this has meant little more than extra bags of free peanuts and pretzels.
The four biggest domestic carriers -- American Airlines, Southwest Airlines, Delta Air Lines and United Airlines -- together earned about $22 billion in profits last year, a dramatic turnaround after a decade of losses, bankruptcies and cutbacks. A big reason for this is the plunging price of jet fuel, which now costs only a third of what it did two years ago.
But that windfall is only slowly finding its way down the aisles. Days after reporting record profits, for instance, two of the nation's biggest airlines announced the return of free snacks in coach.
United said it would begin serving complimentary stroopwafels, which it described as "Dutch-made toasted waffle treats," and American said it would offer free meals in economy class on flights between Dallas and Hawaii, and free snacks on all domestic flights.
Airfares, however, have remained high.
Rick Seaney, co-founder of FareCompare.com, said airfares have been essentially stable for the last two years except on some routes where airlines have faced competition from low-cost carriers like Spirit Airlines.
Analysts said there is little mystery why. A decade of consolidation has reduced the number of airlines competing in many markets, making it easier for dominant carriers to charge more for flights. At Newark Liberty International Airport, for example -- where United, which merged with Continental Airlines in 2010, accounts for 70 percent of flights -- airfares are the highest among the nation's top airports, according to government figures.
At the same time, demand is rising, meaning flights are full and airlines have few incentives to discount fares.
"This is like a perfect storm for the airlines right now, and it could keep going on for the next year," Seaney said. "Giving free peanuts and chips is a way to address the issue that consumers think the airlines have been nickel-and-diming them."
When the recession hit, airline executives reduced the number of flights and successfully argued for the industry to consolidate. Successive mergers between Delta and Northwest Airlines, United and Continental, Southwest and AirTran Airways, and American and US Airways left four big domestic airlines in control of 80 percent of all seat capacity.
In a twist baffling to many passengers, the airlines have kept some of the surcharges that were introduced a few years ago when oil prices were rising, according to George Hobica, founder of Airfarewatchdog.com. These fuel fees can still be found on many international flights -- just under a different name.
"They simply folded them into the fares," Hobica said. "They call them carrier surcharges and fees. They just don't call them fuel surcharges."
Matthew A. Perosi, a consultant for the jewelry industry, recently paid $942.80 for a flight on Delta from Newark, N.J., to Amsterdam, then to Bordeaux, France. The base fare was $292, but the final price included a "carrier-imposed surcharge" of $516, he said. He paid the same surcharge, he said, on a similar flight last year.
"For the past several years, I've just had the genuine feeling that we're all being overcharged," Perosi said. "Most of the time, all the extra add-on fees are more expensive than the actual airfare."
Representatives from the major airlines insist that the extra charges are part of the cost of doing business and are not tied just to the cost of fuel.
Gasoline prices and home heating bills have not fallen as fast as oil prices, but those declines have still been much more substantial than the drop in airfares.
Airlines maintain that consumers are benefiting from their improved financial performance, and that airfares are shrinking, albeit slightly. Average ticket prices fell 3 percent to $385 in the second quarter last year, the most recent period for which figures are available, according to the Department of Transportation. Airlines have reported that the trend has since continued.
Carriers also point out that they are improving their services by buying new planes, installing larger overhead bins, upgrading their entertainment systems and refurbishing airport lounges -- all improvements that customers can see. At the same time, rank-and-file employees are getting bonuses, and new labor agreements show gains that were unimaginable just a few years ago.
A Section on 02/07/2016