Sunday, February 21, 2010

Are they testing the price elasticity of consumers?


In the space of 18 months, the concept of a plane ticket has been transformed from an all-inclusive purchase to a pay-as-you-go plan, turning the relationship between airlines and customers increasingly sour.
Every time a passenger books a ticket, it seems, major airlines have come up with more ways to charge for what once was free, like fees for reserving more desirable seats in the economy section of the plane.Mr. Stewart, who is 6 foot 5, says he managed to cajole a gate agent into seating him there anyway. But ahead of and behind him, an entire section of aisle seats sat empty, apparently because other passengers declined to pay for them. “It’s bad customer service,” says Mr. Stewart. “It would be in their interests to do this better.”
Adding to travelers’ frustration is that the long-cited reason for the switch to “à la carte” pricing — record oil prices — is no longer the driving force behind the changes.
.....lately, the pace of change has been faster, and made travel more complex, uncomfortable and aggravating. back then, bus lines didn’t charge to take a suitcase, or to select a specific seat. And analysts say the airlines have bungled the switch from all-inclusive to à la carte, irritating already cranky fliers even more.
It now costs an average of $25 to check a first bag on many major airlines, though discounts are available if booked ahead online. The airlines have also added surcharges to travel during the most popular times, like the week between Christmas and New Year’s.
What do you think of all the additional fees for the airline traveling? Are they really necessary?

16 comments:

  1. I really do not think all of the extra fees are necessary. Some people have to travel regardless of the fees though. The airlines, like all other companies, want to make the most money possible. Extra fees may cause some people to travel less, but the people that must travel places will make up for the lost customers. If i owned a airline company, I would rather have my customs be happy and still make a good profit. This would cause people to come back and use my airline again. Sometimes extra fees will cause airlines to lose customer satisfaction. (A)

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  2. Although I see why airlines might charge additional fees for things such as checked baggage, I do not find them necessary. The cost of buying a ticket is already outrageous, but adding additional fees is just rubbing salt in an open wound. In the tough economic times we are in right now, many people cannot even afford to buy a ticket, more or less have to pay additional fees for checked baggage. I think if airlines stopped charging these fees and lowered ticket prices a little bit, they would see more people flying, which would make up for any money lost at first for slashing the prices and cutting the fees out. (A)

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  3. I think this is ridiculous. It pisses me off. I am from out-of-state and I want to see my family every once in a while, which is definitely a reasonable thing to want. But with the prices of traveling, it makes it seem as thouhg I'm asking ALOT! I totally agree that good customer service is always the best way of maintaining a business. The better your clients feel, the more they will want to do business with you again and the more they will tell their friends about you. There are airlines that my family absolutely refuses to use becasue of their overpricing and terrible customer service. and this isn't only with airlines. Grocery stores, department stores, you name it...if they don't know how to treat their customers, there are other options. I am very angry about the obvious overcharging by airlines.
    A,E

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  4. I am in agreement with Cierra. The prices of airline tickets are very expensive. I understand that the airlines want to increase profits during this recession but the extra costs are unnecessary. The customer service is very poor indeed. I love flying on Air Jamaica. I am not saying it merely because that's where I am from but of all the airlines I have taken, they have the best customer service and also the cheapest airfare (maybe because it is international travel).

    But the title makes me wonder and agree with the statement is testing the inelasticity of air travel. Most people just have no other option but to takes these airplanes. Its like taxing cigarettes and sodas. People will have to use them.

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  5. I agree with everyone that airline tickets are very expensive and the extra fees are unnecessary. Is $25 of work really used throwing a bag into the cargo hold of the plane? I highly doubt this since the little baggage cars don't use $25 of gas moving the bags the entire 100 yards from the terminal to the plane. Airlines should get rid of these ridiculous extra fees and then more people will be willing to fly. A

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  6. As I was scrolling up and down the blog posts, this post, in particular, caught my eye. The addition of new fees is unnecessary. I understand their purpose is a result of our poor, current economy, but flying was expensive to begin with, so additional costs are an even greater problem. My mom is in India, visiting her mother, and when I spoke to her on the phone she did complain about customer service and how expensive everything had become, at the airport. Also, I agree with Cierra, due to customer service alone, there are airlines my family refuses to support.

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  7. All these new fees make me wonder if the government should set a price floor on air travel. I know American Airlines would be furious, but after looking into it a little, I found out that there always used to be a price floor on air travel and that it was phased out in the 70s. While it's understandable that the price of a ticket must increase with the price of gas mileage, the exponential growth of ticket pricing and fees can't grow forever if they expect to keep a steady base of costumers. The point of our free market economy is so that goods can be allocated efficiently to the people who desire them most. However, if a large majority of it's customers can't afford to fly because of the expensive numerous fees or the poor customer service, airlines are going to see a huge loss in demand that will result in losses much larger than the profits gained from high priced tickets and fees.

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  8. Over spring break I'm going to visit a friend who goes to school in Montreal. I had initially hoped to fly to Montreal rather than endure an 11+ hour drive/train trip. Those hopes were crushed as soon as I looked at ticket prices. All the extra fees and such made the cost of a airline ticket astronomically higer than a train ticket. The airline industry lost me as a consumer...I'll be enduring that 11 hour train trip after all. E

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  9. I think it's really stupid. I am a huge guy (6'2" 300 lbs) and I always try to get an exit row seat so that I am comfortable when I fly. My mother worked for Northwest Airlines for several years, so I get discounts that allow me to afford paying a little extra for an exit row, but it still makes me mad that I have to pay at all; if you are in the exit row you are taking on responsibility for the lives of other passengers in the event of an emergency, and that responsibility should cover the cost of the seat.

    The charges for checking bags is ridiculous as well; if people are going on vacation they should be allowed to bring their things with them. I understand setting a number of bags a person can check for free and charging BEYOND that, but it's wrong to charge people to bring their belongings with them.

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  10. Oh, and Alice, I went to Montreal for a week last year; it's an AMAZING city! You'll really enjoy it =)

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  11. Being from out of state, purchasing airplane tickets to go back home can be really costly. After the airline charges for their services they then charge an extra $20 or $25 which before it was said it was to make up for the high increase of oil prices. The extra fees to fly are simply unnecessary because the prices of tickets are already too much. I think that once prices of airplane tickets begin to stabilize then more people will be flying than driving. Setting a price floor will help people get a better prize on tickets and although it will outrage some airlines it will help the people travel more. E.A

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  12. These changes have been driving me crazy. I had to spend a ridiculous amount of time this past december trying to manipulate my baggage to avoid having to pay an extra fee. Eventually I just had to pray that they would allow me to take my backpack and a very small suitcase both as carry ons. Flying used to be a relatively pleasant experience for me, now I just hate it. E

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  13. The price isn't as high as it could be for many people to stop flying. People need to go where they need to go and sometimes the price or the experience just can't stop them. T

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  14. It is difficult in these times to fly anywhere. The prices are outrageous, and after taking into consideration the fact that most of the cost comes from small things like loading bags onto the plane makes it ridiculous. I find myself bring carry-on luggage only to prevent myself from paying extra money for them to load my baggage on. People may not be able to carry-on all of their luggage, and it would prevent them from flying at all. This is very bad, and it would be beneficial for airline companies to lower their prices.

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  15. Those extra fees are really annoying and i've suffered from them because of luggage before. Some of the charging rules don't make sense to me and the ticket price itself is already expensive enough, but I just can't avoid taking airplanes because I need to travel abroad. I really hope the companies can cancel the extra fees and perhaps it will promote tourism on the other hand.

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  16. I understand the desire of the airline to squeeze as much profit out of the consumers as they can. However, their actions are going to scare off potential customers. Good service is key to attracting people. That's why I would give my business to, say, Qantas Airlines, versus Jet Star or Northwest where you most likely are going to have to pay extra. Perhaps the airlines should take a step back and think about how their actions are affecting consumer interest.

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