Airlines these days are fighting to survive; gas prices have risen exponentially, about 180% over the last decade. And though fuel costs continue to rise and more and more cut into the bottom line, airfare has barely gone up over the same period.
Airlines have only a few tricks left to keep themselves from failing to turn a profit, or worse, succumbing to bankruptcy. Mergers are one front on the fight for survival for some brands, and the industry continues to consolidate. Luckily, for them, there are other methods to aid them in their fight for survival.
One weapon I recently heard about is a tax loophole on baggage fees. It seems that baggage fees are not taxed by the U.S. government. Whether the bag is charged $25 or $35 for being checked, or if you are on Spirit Airlines where they charge you to simply carry on a handheld suitcase, the airline gets to keep every cent of the fees they charge here. There could also be several other little fees that the airlines could charge for that might avoid a tax, especially in the near future.
This is might seem completely irrelevant to you, but it is big for the travel industry. Airlines might be making less profits from selling seats themselves, with fuel so high and numerous taxes and surcharges added for each sold seat, but this little tax break may slowly cause more and more airlines to exploit it. Many airlines may follow the lead of budget carriers like Southwest and Spirit, who have low ticket prices but fees for many extras (the a la carte system). Thus, more than ever, it is in your best interest to look before you book – flight costs may be going down, relative to inflation, but fees seem to be here to stay.