Wednesday, August 4, 2010

Air passengers vote with their wallets on airline fees

Watching the ongoing hostility between airlines and passengers is like rubber necking at an accident scene. It’s fascinating and horrific at the same time, especially if you love aviation and travel as much as I do.

At the core of this fumarole is passenger anger at being nickel and dimed on airfares and the airlines’ attempts to rake in from as many separate paths as possible, the true cost of moving people and their things.

Washington, as is its wont, is rushing headlong into the fray, because airline news is always hot-button. So new rules are now being considered that will order airlines to disclose on their websites all the fees that could affect the final ticket price.

In July, Congressman Jim Oberstar, chairman of the house committee on transportation and infrastructure told airline executives, “If you don’t exercise self-restraint then you’re going to get pushback from the traveling public, it will come to the Congress and then the Congress will act. That’s not a threat, that’s history.”

That’s very recent history, in fact. Passenger pushback led to the 3-hour tarmac rule that went into effect in May that has so vexed the airlines they cancelled more than 140 flights the first month and a number of them have applied to the DOT for waivers.

But there’s another pushback development being reported today and it’s not in Washington, it’s in the marketplace.

In a white paper released by the travel industry research company PhoCusWright, there’s a significant cost when airlines spring undisclosed fees on would-be travelers purchasing tickets online.

The Consumer Response to Travel Site Performance study, reported that as many as 43% of customers abandoned their ticket purchases because the product and or fees were higher than they were willing to pay. It was the most common reason by far why people failed to complete a purchase. “This indicates a relatively significant level of frustration with ‘hidden’ costs that people are not able to take into account during the planning process,” the report said.

That the true price of something is a critical factor in decision making seems like a pretty simple concept. But amid the fierce competition for air travelers over the past few years, most airlines chose to abandon the high ground of full disclosure for what my late-father-in-law would have called treating the customer like a chump.

So to learn that folks are responding to an inherently deceitful practice by snapping their pocketbooks shut is something to see, and oh so much more satisfying that any solution cooked up in Washington.


Anonymous said...

governmental legislators and regulators love to take expansive action on very small problem samples; wonder how many more px were unhappy about the 140 cancellations than the 3+ hour tarmac waits. The customers will fix it over time if legislators butt out.

Anonymous said...

I agree with the commenter. If the legislature fixes it, the fix is worse than the problem. I encourage the airlines to have honest full prices. Base those prices on realistic estimates of percentage seats to be sold. Maybe then we can have adequate staffing, and better passenger satisfaction. I qualify for upgrades with points, I have the points, I would rather pay standard business class fare, changeable, refundable, and know what I get than risk not getting the upgrade. My points have been used to buy my television sets.