Packaged Fees: Are the Perks Worth the Price?

Airline “unbundling” of formerly “free” features and services has been big lately. You’ve all heard about new and separate fees for so many services that you’ve lost count—services that you once took for granted as part of the base price. The current list, at least on some lines, includes checked baggage, seat assignments, exit-row seats, pillows and blankets, meals and snacks, making an online reservation, and even taking a bag onboard. Now, however, you suddenly see some new repackaging. The big difference is that what was once “free” in the old bundled fares now costs extra as a package.

United Airlines seems to be leading the pack. It just announced two new inclusive-price packages that combine several features you might like:

• The base “Premier Travel” package provides access to extra-legroom “Economy Plus” seats, speedier security lines, earlier boarding, checked baggage, and bonus frequent flyer miles. Basically these are services that “elite” frequent flyers get without paying extra. This option is available at 70 larger U.S. airports.
• “Premier Travel Plus” adds access to Red Carpet Club airport lounges on the day of your trip. It’s available at 15 airports with Red Carpet Rooms.

{{{SmarterBuddy|align=left}}}United claims that you can “save” as much as 50 percent with these packages. That depends, of course, on whether you’d otherwise buy all parts of the package separately. I tried a test trip from San Francisco to Washington in late May, with one checked bag. The lowest base round-trip fare I could find was $416; the lowest fare with a decent schedule was $496.

• Premier Travel would add $166 round trip. Purchased separately, Economy Plus seating would add $118 and one checked bag each way would add $46, for a total of $164. Thus, the package wouldn’t “save” anything.
• Premier Travel Plus would add $232. Purchased separately, Red Carpet room access passes cost $38 each, or $76 round trip, for a total unbundled price of $240. Thus, the package has a slight $8 advantage.

Of course, these calculations do not give any credit to the mileage bonuses or to early boarding and priority airport lines, which would give another edge to the packages. And differences would vary by route.

My conclusion: Neither package is a good deal if you don’t check any bags, the base package is a good deal only if you assign some value to the airport benefits, and the complete package is a reasonable deal if you check at least one bag and want Red Carpet access. Both look much better if you want to check two bags.

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United’s other package covers two checked bags on every flight for a full year for $249. That pays off after seven or more round trips if you check one bag, four round trips if you check two bags. And United has been selling annual access to Economy Plus for more than a year. These are good deals only if you travel United a lot.

Delta, too, is getting in on the act. Buy your tickets with a Delta SkyMiles AmEx card, and Delta waives the usual $25 fee for your first checked bag. This deal applies to up to eight tickets on the same purchase. Obviously, there’s no downside, as long as you have the Delta card, and if you travel Delta a lot, you should probably have that card.

Clearly, United expects its several packages to be “revenue positive,” gaining more revenue than trying to sell the components separately. So far, I haven’t seen any similar packages from other airlines. But I’m sure other lines will be looking closely at what happens at United. As I’ve often noted, at most airlines, corporate planning largely means “me, too.”

Whatever the airlines’ motives, as a consumer, checking out each package is relatively straightforward. Determine the cost of whatever services you really want and compare those separate costs with the package price. If the prices are close, the package is probably a better bet because of the minor benefits that you wouldn’t buy separately, but would make your life a little easier.

Have you ever purchased one of United’s bundled packages, or do you plan to in the future? Do you think the perks are worth the price? Share your thoughts and experiences by submitting a comment below!