Posted by: pizzainmotion | April 5, 2012

Airlines Continue To Find Ways To Make Up Lost Revenue

The cost of fuel continues to eat into the profitability of the airline industry.  The industry doesn’t need excuses to institute new fees to customers, and to find ways to cut costs where applicable.  Two recent examples:

Frontier Airlines to Stop Serving Warm Cookies:  This was a Midwest airlines tradition for a number of years.  Frontier says that serving a cookie didn’t fit their image:

“During that review, it was determined that the cookie did not align with either the perception or the financial reality of a low-cost carrier,” Carpenter continues to the Post.  “We were the only domestic low-cost carrier offering a free perishable snack.”

Don’t get me wrong.  I’m not sitting here lamenting the loss of the cookie.  I never actually flew Midwest (and haven’t ever flown Frontier).  I just find the copycat nature of the carriers amusing.  If one of your competitors takes something away from customers, you should too?

I think both AA and Southwest have excellent examples of doing things differently than their competitors successfully.  AA charges it’s lower elites for domestic upgrades to First (these lower tier elites do earn occasional free upgrades throughout the year based on miles flown).  Because not every elite is eligible for an upgrade, top-tier Executive Platinum members generally enjoy a higher upgrade percentage on their flights.  Additionally, lower tier members who are willing to pay for an upgrade are generally more likely to get an upgrade when they want one.

Some might say AA is a bad example, being in bankruptcy.  So, Southwest is another good example.  They don’t charge for checked bags (up to 2 free per passenger).  Their competitors keep saying Southwest is leaving money on the table and it’s a competitive disadvantage.  Then why does Southwest keep earning a profit when some of the legacy carriers have had a ton of trouble doing so over the last couple of years.

That’s a great segue to the second change announced.

Allegiant Airlines is Now Charging For Carry-on Bags:  I’ve also never flown Allegiant.  It’s a small carrier that focuses on budget travelers going to destinations like Las Vegas and Orlando. They announced that the fee at the airport for a carry-on would be $35, and they plan to announce a reduced fee if you pre-purchase the carry-on option prior to arrival at the airport.  Don’t worry, you can still carry something on as long as it fits underneath the seat in front of you. 😀

This really just strikes me as a price increase in disguise.  How many people going on a leisure trip can fit everything underneath the seat in front of them?  This might work for a business traveler on a day trip, but that’s about it.  And, since Allegiant charges for checked bags as well, there’s really virtually no way to escape paying some sort of fee for your luggage, which is why this just strikes me as a price increase.

Who knows?  Maybe it will work and generate revenue for them.  But, things like this are what keep the Allegiant Airlines and Spirit Airlines off my radar for travel.


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