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Airlines Have Discovered That Passengers Will Pay For Just About Anything



At least the air in the cabin's still free. It's free, right?

At least the air in the cabin's still free. It's free, right?
howstuffworks.com

By heraldtribune.com | Aug 17, 2008

As far as airlines are concerned, you are no longer just a passenger. You are an opportunity to raise "ancillary revenue."

And when it comes to charging for things that were once free, the sky's the limit.

In just a few short months, the airlines have discovered to their glee that their customers are willing to pay for most everything from checked bags to soft drinks to pillows and blankets -- and are doing so without much fuss.

With that knowledge in hand, the airlines are not about to stop.

From United to JetBlue, from Delta to US Airways (which Time magazine recently called the industry's "stingiest" airline), marketing staffs are coming up with ways to extract more money from travelers' wallets.

The opportunities seem enormous: United thinks that it can raise as much as $1 billion a year from this new menu of fees, which the industry calls an a la carte approach.

The airlines are unapologetic, with a ready excuse in the form of record jet fuel prices, which topped $4 a gallon this summer.

"Airlines need to have a way to recover the cost of their product," said Edward Bastian, the president and chief financial officer of Delta.

Fast-rising oil prices kicked in the door to higher ticket prices and other fees that the airlines could not wedge ajar in recent years, thanks to a plethora of Internet travel sites that passengers use to find the cheapest fares.

Many travelers seem willing to accept the airlines' explanation that consumers must shoulder the burden of higher fuel prices.

"We all understand that gas and oil are so expensive," said Kay Kelly, 37, a physical therapist who traveled from Florida to Fargo, N.D., this month for a class reunion.

"There's only so much they can do to stay competitive, and we don't get too riled up over the fees."

Voicing a sentiment that the airlines must hope other travelers will embrace, she continued: "If we're going to fly, we're going to fly -- and whatever it is, it is. It wouldn't prevent us from going where we want to go."

Travelers' willingness to accept the fees is not attributable solely to their acknowledgment of higher gas prices. Consumers have seen service charges popping up on everything from tickets to Broadway shows and rock concerts to amenities on cruise ships.

Across the economy, marketers have turned the practice of tacking on extras into an art form, softening up airline passengers for what now seems to have been inevitable.

Another factor is at play, too. Overnight, the Sept. 11 attacks turned travel from an adventure into a hardship, with intrusive security checks that passengers must endure if they want to board a plane.

Add it all up, and the landscape for air travelers has changed drastically.

The shift causes veteran customer service experts to shake their heads. Mary Gilly, a professor of marketing at the University of California, Irvine, said: "I think the airlines are being pretty disingenuous calling it 'a la carte pricing.' Please. This is not a Chinese menu."

Yet the airlines seem to have turned a deaf ear to any grumbling that is heard in airport corridors and that resounds on industry Web sites.

That is not surprising, considering the money they have generated in a short time by charging for former freebies. JetBlue collected $40 million in the second quarter by charging extra for seats with more legroom.

United, meanwhile, expects to yield $275 million this year from charges for baggage.

As they rearrange the dynamics of what customers can expect for their air fares, the carriers are looking at charging for everything from selecting a seat -- any seat, not just a window or aisle seat, or one with extra legroom -- to wireless Internet connections.

They are also considering a new type of all-expenses-paid ticket that would include all the "services" for which they now charge extra.

In other words, it would be an easy, one-stop way to pay for everything that was free just a few short months ago.

The word "glamorous" has not applied to air travel for quite some time.

But passengers like Leo Lanoie, 59, a doctor in Prince Albert, Saskatchewan, remembers when it did.

He recalls merry flights when even coach-class travelers could drink all the cocktails they wanted, gratis, and when the only complaint was that Air Canada served merely steak, not a choice of entrees.

"I suppose people are generally acting like they're OK with the fees because they don't feel like they have a choice," said Lanoie, who flew through Chicago on United recently.

"All the airlines are doing it, so it's not as though you can just take your business elsewhere."

Such a sense of helplessness is widespread, said Banwari Mittal, a professor of marketing at Northern Kentucky University and an expert on consumer behavior.

"Consumers will get angry when they find a target of retribution, which is a specific company or a specific person," Mittal said.

"But when it's the macro environment, there's nothing to get angry at."

Moreover, passengers have learned that venting their anger at an airline employee means that they may be escorted off the premises by federal authorities, Gilly said.

"You complain at Starbucks, you get a freebie," she said, "If you throw a fit at an airport, you could be picked up by the TSA."

That helps explain why even the most controversial changes, like a recent decision by US Airways to begin charging $1 for coffee and tea, and $2 for bottled water, have slipped through without much dissent.

Before that charge took effect this month, the flight attendants union at US Airways vowed that attendants would provide free beverages in order to calm irate passengers.

Water riots, however, have failed to materialize, and the airline said in a recent employee newsletter that the change had come off without a hitch.

"The feedback? Pretty darn good!" the airline declared.





 

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