Airline ancillary revenue: what’s next?
This is going to be an expensive flight!
A recent article on CNN fuelled increasing rumours that airlines are contemplating charging passengers for carry-on luggage. This prompted a travel blogger mate of mine, SimplyWanderlust, to post an open letter to airlines in America pleading with them to reconsider. If this rumour is indeed true, that would be the limit. It is downright outrageous!
I understand that times are tough and that low-cost airlines are posing a formidable challenge for the incumbent airlines, forcing them to increasingly look for other ways to generate new streams of revenue. Charges for food and drinks, headsets, preferred seats, the use of telephones and WiFi on board, even for the right to board first are perfectly acceptable methods to generate ‘ancillary’ (non-ticket) revenues. The thing is, these methods offer passengers a choice of services which they may or may not choose to utilise. However, when airlines start to think of charging passengers for bringing their carry-on luggage on board, or for the use of the lavatories on planes, this amounts to little more than daylight robbery. In that situation, passengers who might want to avoid paying for checked luggage by carrying hand luggage only will be charged just as well. There’s no choice there. Besides, most passengers always travel with some form of luggage, be it a suitcase or a briefcase. Same thing goes for passengers who need to go to the lavatory; if you have to, you have to, and there are no other options in an aluminium tube, 30,000 feet in the air.
The need for ancillary revenue is growing as competition heats up, ticket prices fall and airlines struggle to keep costs low. With a bit of creativity, airlines should be able to come up with a myriad of possibilities. However, only ancillary revenue generated from services that provide passengers with a choice should be condoned.
I’m interested to read what you think of increasing ‘ancillary’ charges by airlines. Please express your opinions here in the comments section.
Hear, hear over here as well!
Another great point. The cost base for incumbent airlines is so different from low-cost airlines but they have to compete for the same passengers. I too doubt if the extra charges really can put the incumbent airlines on the same footing as low-cost airlines. I feel that all these extra charges will only alienate their existing client base, especially if they go overboard with the charges. Thanks for your comment.
I would love to see the numbers on this, whether or not it charging for headsets, meals, bathrooms, carry-on luggage, etc really puts the larger airlines (the airlines with union contracts) on the same footing with discount airlines (no union contracts). I cannot imagine that it does…and now some of the discount airlines (Southwest) are advertising themselves as “no hidden fee” airlines. It’s making JetBlue seem more luxurious — and cheaper.
In other baggage charging news, US Airways is expected to start charging an extra $5 per bag checked at the airport as a service fee.
Hear, hear!
That’s a good point about including the extra fees in the total cost of the ticket. I’m not sure what the regulations are in the US but in the European Union, airlines must publish the final ticket price in their advertisements. However, this doesn’t include ‘ancillary’ charges. If airlines do resort to charging for checked/carry-on luggage, these charges should be included in the ticket price I believe as, well, who doesn’t travel without a bag?! Thanks for the comment.
I’m with you, Keith. This is getting ridiculous. There was a time when we all joked about airlines charging for use of toilets or even oxygen, but both of those don’t seem so far-fetched any more. You can’t even ship your luggage to avoid the airlines’ baggage fees, because shipping is very expensive as well. So what are we travelers supposed to do? Buy clothing, toiletries, etc. once we get there and throw them away before we come home? No, of course not, we’re stuck. Like you said, everyone carries something aboard an airplane.
I also wish they would include these extra fees in the overall ticket price so that when we are pricing airfare, it’s obvious what the true cost of the ticket is.
I can’t help but wonder at what point the traveling public will finally rebel and say “Enough is enough, we just won’t fly any more”?