Ancillary revenue for the airlines
You know how I despise the airline industry.
“Think about it,” I told whoever would listen last week. “The employees hate it because they’ve been shafted time and again. The shareholders hate it. The management suffers because they’re losing billions. And the passengers … well, who really likes to fly now?”
That said, I’m crazy enough to think it could be fixed. But, hey, I think that about every business.
Is “ancillary revenue” a start to getting the business back on its feet? You know, the nickels and dimes that come from charging for luggage, pillow and blankets, soft drinks and more legroom. These charges are adding up to millions for the Uniteds and US Airs.
“Overnight, the 9/11 attacks turned travel from an adventure into a hardship, with intrusive security checks that passengers must endure if they want to board a plane,” says Micheline Maynard in an article in today’s New York Times.
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 ‘à 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’s not surprising, considering the money they’ve 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’re 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.
Maybe such a sea change will lead to significant change in an industry that seems stuck. But there’s another model, I think, that’s worth consideration, one that begins with customer service. Maybe they could charge extra for that too.
What’s your idea?