Passengers likely will see new, more creative fees
Plan
on carrying on your jacket with you on your next flight? Soon it could
cost extra, thanks to all the money airlines are making on fees for
everything from checked luggage to priority boarding privileges.
This
year, revenue from airline fees will reach a record high $36.1 billion
according to a study from consulting firm IdeaWorksCompany, which
analyzed data from 176 carriers around the world. That's more than 11
percent higher than the total of about $32.5 billion recorded in 2011,
and about 40 percent higher than fees airlines brought in two years ago.
According
to the study, the growing revenue from fees presents "significant
commercial potential for airlines," and with the operating environment
still challenging, extra fees are increasingly attractive and in many
cases crucial for carriers all over the world.
But seeing as airlines have already charged for virtually every
"extra" that used to be free, carriers are having to become increasingly
creative with the new fees they come up with to boost their bottom
lines.
"Airlines have just about exhausted the fees they can
introduce for services they used to offer for free, such as choosing
seats and getting a snack on board," a recent USA Today article
reported. "They're becoming retailers by devising new services and
products to sell."
Recently that's meant carriers rejiggering
aircraft layouts to accommodate roomier seats for which they can charge a
premium fare. Others have turned to charging passengers penalties for
opting for a customer service agent at the airport instead of an
electronic kiosk. Upgrading or selecting a seat will also cost you with
some carriers.
American Airlines has even taken to offering services for a fee
after the plane has landed. Depending on how many bags you have, the
carrier will deliver your luggage to your local destination within four
hours of arrival for $29.95 to $49.95.
Even with projections for
airline profitability being revised up from $1.1 billion for 2012 to an
expected total of $4.1 billion, according to the International Air
Transport Association, passengers aren't likely to get a break from fees
anytime soon. According to TIME, it's actually the most fee-crazy
airlines, such as Spirit and Europe-based Ryanair, that have been the
most profitable in recent years while those that have continued to offer
freebies, such as Virgin America, have languished.
While a full-scale passenger revolt against fees hasn't materialized,
airlines are cognizant of the fact that tacking on extra charges needs
to be done tactfully.And even though consumers might be feeling a bit
nickel-and-dimed with what seems like a new, more inventive airline fee
every week, the pace of fee increase won't like be as steep as they have
been in the past.
Sandeep Choudhary [BSc , MBA]
Real Estate Broker 9713087676
www.gmware.com
Online Assistance : choudharysandeep825@gmail.com
http://sandeep-choudhary-gmware.blogspot.in/
