Traveling for business can be an unpleasant experience—long security lines, flight delays, uncomfortable seats and “snacks for purchase” —are just some of the highlights. In 2013, we have something else to look forward to—more fees. Last year, major airlines collected $36 billion in high-margin fees. These fees now represent a significant source of revenues (and profitability) for the airlines. So it's no surprise that the industry as decided to start adding more fee-based services as well as fees for benefits that were previously included in ticket prices.
Some of the new fees, fee increases and fee-based services being introduced by major carriers include:
- Fees for economy-fare passengers to board flights earlier
- Fees to pass through security in less time
- Fees to select seats
- Fees to sit in premium coach areas
- Fees to stream internet-based videos and movies during flight
- Fees to have your luggage shipped to your final destination to avoid dealing with it on flight day
The airline industry successfully tested the a la carte fee-for-service model and given its success, it will likely continue to expand its use. Based on this success for one sector of the travel industry, its likely hotels, car-rental, airport transfer and other travel-related ventures will also adapt their pricing model. What about your business? Do you offer bundled pricing for services? If so you may not be capturing the full value for what you sell.
[Los Angeles Times
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