Saturday, March 6, 2010

Ancillary Revenues ... Revisited

This morning I read an HBR Daily Status entitled 'Shipping Your Luggage Can Save Money'

'Nearly $260 in savings. If you're traveling with heavy luggage, sending your
stuff via a shipping carrier can save you a lot, according to On
at least one airline, a heavy, oversized bag can run you nearly $300 if you check
it on a domestic flight, but shipping might cost only $40, depending on carrier and
route. Other advantages: Better tracking and less schlepping,

Well SWA declared that it has made more money attracting passengers than if they charged for carriage of baggage, a great value proposition.

But I digress, if people like FedEx, UPS and others can ship luggage cheaper and deliver on time while providing us with the means of tracking the luggage at every step of the way and I bet they will pick up from our place of residence or work. This is a new twist on an old business.

Sure, we might all be sceptical now, but at the rate airlines are raising their fees to carry bags, I am sure passengers will seriously look at alternatives (either you switch to a carrier that does not charge or ship at a much lower cost).

Knowing legacy airlines they will milk this source of revenue dry and when they discover what happened, they will feel the pinch of a couple of hundred million dollars, that are no more, and there will be wailing and gnashing of teeth.

Far fetched, I don't know, but a few years back who ever dreamt of a bag fee.

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