StopNTSing
Well-known member
- Joined
- Feb 16, 2003
- Posts
- 715
I'm surprised nobody else picked this up yet. From everybody's favorite industry know-it-all, Mike Boyd:
http://www.aviationplanning.com/HotFlash.htm
At $15 It Was A Pain. At $25, It May Be A Revolt
Bag Fees: Southwest Better Hire More Staff
The airline industry might want to start considering that there is a limit to what passengers will tolerate.
In the last month, at least one major carrier has "enhanced" its frequent flyer program by raising the miles for upgrades and implementing a "co-pay" fee. That upgrade for a party of three to Europe went from 90,000 miles to 110,000 miles plus a $1,200 (yes, over a grand) co-pay. The carrier's high-level exalted spent-uranium-level frequent flyers must feel real valued right now. Great idea: tick off your most frequent customers.
Then the announcement came that carriers are raising first-bag fees to between $23 and $25, depending on airline. Toss in things like periodic but major security failures that have shut down airport terminals over the past month, the threat of more intrusive pat-downs, the stories of full-body scanners, rumors of no movement in the last hour of the flight, and the whole concept of air travel takes on a visual reminiscent of the Spanish Inquisition.
But it's the baggage thing that's liable to cause the natives in the coach cabin to exhibit unrest.
The rationale behind baggage fees really isn't out of line, but the airline industry has failed miserably to articulate it. They've abandoned the PR field to consumerist twits and vapor-brained politicians.
The airline industry seems to be taking the Marie Antoinette approach: let 'em eat cake. Passengers have no choice. Take it or leave it. We don't have to 'splane nothin' to them. But the industry may want to consider what happened to the lovely and gracious Ms. Antoinette. There are more than a few loons on Capitol Hill that are willing to make airline heads roll to get some cheap political points, not to mention the "consumerists" and their running-dog talk-show supporters. (They're not airline experts, but they play one on TV.)
Even With Fees, Airlines Are Taking In Less. Both on the surface and in hard economic reality, bag fees make sense. First, unit revenues were down around 10% for the year 2009. Even with travel-specific ancillary fees (baggage charges, which are an intrinsic part of the consumer's trip, as opposed to the option of buying stale potato chips on-board) passengers were actually paying less to travel than the year before.
Second, with internet booking, ticketing, and check in, the functionality of airport facilities has fundamentally changed to one that's baggage-centric, and less passenger-centric. That ten-position ticket counter isn't needed when there aren't any tickets anymore, and passengers process themselves at home or at a check-in kiosk. Airport facilities are more into bag-processing than passenger processing.
Finally, charging bag fees is essentially a selective fare increase: No bag for the carrier to handle, no fee.
But none of that is registering with the flying public. All they see is a minimum of a $50 hit round trip just to give their Samsonite to somebody at the airport they don't know. They don't see any of the rationale. They don't care if, even with the bag fee, they may be paying no more than last year's trip to Tucson. They don't have any idea of the complex nature of airline pricing. All they know, read, and hear is that those greedy airlines are hiking fees. And we hear nothing from the airline industry.
They May Not Really LUV Bags, But Passengers Are Noticing. So, we have a situation where carriers really do need the revenue those fees bring in. But in the process they've created a golden market opportunity for Southwest to look like the knight in shining 737s.
Consumers are taking notice that Southwest isn't charging for baggage. They hear Southwest isn't clipping them another $25 bucks for that change of underwear that won't fit in the carry-on. In short, for consumers that do have luggage, Southwest, right out of the box has a perceived $50 round-trip "fare" advantage. With savvy yield management, the airline can engineer that into both more revenue for it and lower costs for the consumer. And, at some point, frequent flyer loyalty goes away at fee-charging carriers. That family vacation to Florida is getting pretty pricy when it's another $100 or more just for luggage.
It's true that Southwest is leaving millions on the table by not charging for luggage. But they may be putting millions more in the passenger cabins of their airplanes. One additional WN fare on average is the equivalent of almost five first-bag fees. Do the math.
Consumers probably are. And there's not much other carriers can do about it.
http://www.aviationplanning.com/HotFlash.htm
At $15 It Was A Pain. At $25, It May Be A Revolt
Bag Fees: Southwest Better Hire More Staff
The airline industry might want to start considering that there is a limit to what passengers will tolerate.
In the last month, at least one major carrier has "enhanced" its frequent flyer program by raising the miles for upgrades and implementing a "co-pay" fee. That upgrade for a party of three to Europe went from 90,000 miles to 110,000 miles plus a $1,200 (yes, over a grand) co-pay. The carrier's high-level exalted spent-uranium-level frequent flyers must feel real valued right now. Great idea: tick off your most frequent customers.
Then the announcement came that carriers are raising first-bag fees to between $23 and $25, depending on airline. Toss in things like periodic but major security failures that have shut down airport terminals over the past month, the threat of more intrusive pat-downs, the stories of full-body scanners, rumors of no movement in the last hour of the flight, and the whole concept of air travel takes on a visual reminiscent of the Spanish Inquisition.
But it's the baggage thing that's liable to cause the natives in the coach cabin to exhibit unrest.
The rationale behind baggage fees really isn't out of line, but the airline industry has failed miserably to articulate it. They've abandoned the PR field to consumerist twits and vapor-brained politicians.
The airline industry seems to be taking the Marie Antoinette approach: let 'em eat cake. Passengers have no choice. Take it or leave it. We don't have to 'splane nothin' to them. But the industry may want to consider what happened to the lovely and gracious Ms. Antoinette. There are more than a few loons on Capitol Hill that are willing to make airline heads roll to get some cheap political points, not to mention the "consumerists" and their running-dog talk-show supporters. (They're not airline experts, but they play one on TV.)
Even With Fees, Airlines Are Taking In Less. Both on the surface and in hard economic reality, bag fees make sense. First, unit revenues were down around 10% for the year 2009. Even with travel-specific ancillary fees (baggage charges, which are an intrinsic part of the consumer's trip, as opposed to the option of buying stale potato chips on-board) passengers were actually paying less to travel than the year before.
Second, with internet booking, ticketing, and check in, the functionality of airport facilities has fundamentally changed to one that's baggage-centric, and less passenger-centric. That ten-position ticket counter isn't needed when there aren't any tickets anymore, and passengers process themselves at home or at a check-in kiosk. Airport facilities are more into bag-processing than passenger processing.
Finally, charging bag fees is essentially a selective fare increase: No bag for the carrier to handle, no fee.
But none of that is registering with the flying public. All they see is a minimum of a $50 hit round trip just to give their Samsonite to somebody at the airport they don't know. They don't see any of the rationale. They don't care if, even with the bag fee, they may be paying no more than last year's trip to Tucson. They don't have any idea of the complex nature of airline pricing. All they know, read, and hear is that those greedy airlines are hiking fees. And we hear nothing from the airline industry.
They May Not Really LUV Bags, But Passengers Are Noticing. So, we have a situation where carriers really do need the revenue those fees bring in. But in the process they've created a golden market opportunity for Southwest to look like the knight in shining 737s.
Consumers are taking notice that Southwest isn't charging for baggage. They hear Southwest isn't clipping them another $25 bucks for that change of underwear that won't fit in the carry-on. In short, for consumers that do have luggage, Southwest, right out of the box has a perceived $50 round-trip "fare" advantage. With savvy yield management, the airline can engineer that into both more revenue for it and lower costs for the consumer. And, at some point, frequent flyer loyalty goes away at fee-charging carriers. That family vacation to Florida is getting pretty pricy when it's another $100 or more just for luggage.
It's true that Southwest is leaving millions on the table by not charging for luggage. But they may be putting millions more in the passenger cabins of their airplanes. One additional WN fare on average is the equivalent of almost five first-bag fees. Do the math.
Consumers probably are. And there's not much other carriers can do about it.
