JetBlue CEO: Price gouging is a "rude" fact of air travel

On Monday Dave Barger, the CEO of JetBlue (JBLU), acknowleged a fact that many airlines would prefer their customers not think about.

For both the company and consumers, Barger told "CBS This Morning," a good flying experience is "about efficiency, it's about being productive. And I think for us, as well, it's not about gouging the travelling public."

Barger said some of the additional and inflated fees airlines tack on to the cost of flying are "rude, when you really look at it." And he noted that carriers price gouge "because they can," due to a lack of competition in the marketplace.

There have been at least four major airline company mergers since 2008, and the four largest airlines now reportedly control more than 80 percent of the nation's travel market.

And many airlines -- both full fare and discount carriers -- have become notorious for "nickel and diming" the general air passenger population with additional fees for baggage, in-flight food, reservation changes and other amenities.

Those additional fees are also adding up, with the air carriers raking in profits, as the global economic recovery picks up momentum.

The Bureau of Transportation Statistics, for example, notes that in the fourth quarter of last year, airlines collected $29.3 billion from fares -- while passenger airlines brought in a total of nearly $800 million in baggage fees and $675 million in reservation change fees.

Many airlines are also trying to squeeze more passengers into their planes, to make each flight more profitable -- but there's also a growing focus on bringing in passengers into business class -- which is reportedly responsible for more than 20 percent of overall airline revenue.

JetBlue, for example, made its reputation as a low-cost carrier. But the company is also trying to compete in the lucrative business class sector with its new "Mint" cabin -- which features lie-flat seats on flights between Los Angeles and New York.

"I think the traveling public wants an industry that's profitable, investing in the product," said Barger, "and the carriers, I think, that are really going to win long-term are going to be the carries that aren't gouging the traveling public. I mean the whole cabin...and delivering a product."

  • Bruce Kennedy

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