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Air Transport: Extra Fees but More Frustration and Dissatisfaction

Airlines around the world, and especially in the United States, are succeeding in milking billions of additional dollars from their customers for ‘extra’ services that used to be included in their fare prices. But in the process they have frustrated more than half of their customers and left as many as 75% of them dissatisfied with their airline experiences. Globally airlines are poised to rake in almost $110 billion in revenue this year from the sale of so-called ‘ancillary services’ such as the ability to check one or more bags, select seats together and/or in advance, to get reduced ticket change fees or additional frequent flier mileage points, or to get preferred check-in and security clearance treatment.

Above: Raimond Spekking

The five large U.S. airlines - American, Delta, United, Southwest and Alaska – alone are forecast to bring in a record total of around $29.1 billion in ancillary revenue this year. That’s according to a new forecast from IdeaWorks, a consulting firm that has tracked ancillary revenue activity in the travel industry for more than a decade and which advises travel companies on ways to increase those ancillary revenues. Yet evidence is mounting that while airlines clearly have established the practice of charging more for services that historically were included in the price of a ticket, a large segment of travellers – both leisure and/or less frequent travellers and high mileage business travellers and/or very frequent fliers – are frustrated or dissatisfied with the kind and composition of the various fare price options they are being offered by the airlines.

Above; Kevan James

Tom Bacon, an expert in the field of revenue optimisation (how companies adjust prices up and down to obtain, ideally, the maximum amount of revenue each customer if willing to pay for a service or product), says that most consumers now are generally comfortable with buying travel services a la carte rather than as a ‘bundled’ or all-in traditional fare. But a majority of travel consumers – 52% according to a recent survey by travel sales technology firm Travelport - remain frustrated with how airlines present their fully-stripped down, seat-only Basic Economy fares as well as how they present various higher-priced branded fares that include various combinations of additional services. While very price sensitive travellers will sometimes select the lowest-priced Basic Economy fare offer and pay only for services like checking a bag if they actually need it, Bacon says airli