Wednesday, February 24, 2010

Ancillary Revenues

I was reading a recently published e-book THE ANCILLARY ART Maximizing Airline Ancillary Revenue & Customer Loyalty – Miyuru Sandaruwan which makes interesting reading (click here to download).

When low cost airlines started, they unbundled air fares, they went back to basics and anything else was paid for on demand (food, blankets, newspapers etc..). In the last couple of years legacy airlines started unbundling their air fares, except with a twist, their air fares remained the same, so it was like paying twice for the same thing, with no additional value added.

My pet peeve is Checked Bags. You pay for the bags and you get no guarantees. It took United Airlines 40 minutes to get my checked bag to the baggage claim area in Chicago, considering my flight from Detroit to Chicago was about an hour. Of course my bag was not the only bag in the hold, there were more unpaid for bags in the hold than paid. All these oversize so called carry-ons, ended up in the hold and got delivered at arrival at the door of the aircraft. So on most US carriers you have no baggage allowance when you travel on an aircraft and for sure dishonesty apparently pays.

It appears that the airlines gave up on efficiency and savings and good customer service as a means to improve revenues. Instead they reverted to all these surcharges that amount to paying twice for the same things and the irony in all of this, these ancillary revenues mostly apply to economy class passengers, the mainstay of their traffic, that sustained the airlines as their darlings in Business and First class abandoned them and jumped ship.

Ah well, go figure....

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