Consumers Dislike Fees, But Are Willing To Pay For Choice

No one ever before asked consumers in a survey what they thought of à la carte airline pricing, so Amadeus decided to. Passengers were polled about the new fees for everything from bags and food/beverages to pillows and seat assignments.

The results of this, the first survey of airline passengers on à la carte reveals that while consumers aren't happy about the fees, they are willing to pay for their choice of services — and don't consider it "nickel-and-diming." But the majority of air travelers (85 percent) dislike paying fees for services they received free as little as a year ago.

Don't charge me for my baggage! is one of the key findings of the new "Flying A La Carte" survey. Seventeen percent indicate blankets and pillows should be free, while 15 percent want free seat selection. Fifty-seven percent have or would pay for food and beverages on a flight and 37 percent have or would pay extra for checked bags.

Half (52 percent) understand why airlines have begun charging for services that used to be free, and half (53 percent) like getting the cheapest base ticket so they can decide what other optional products/services to buy.

Less than one-third of respondents think airlines have gone too far with new fees.

Willingness to pay extends outside the fuselage, especially when it means greater flexibility and convenience. Fifty-seven percent report that they would pay extra for the ability to make ticket changes without penalty. Nearly 40 percent indicate that they would pay for less hassle and more time savings in the form of priority check-in and boarding, priority baggage handling, and the ability to fly with an additional carry-on.

Beyond that, à la carte pricing presents an opportunity for airlines to differentiate themselves and to use service options to build brand loyalty. Fewer than two in 10 fliers wanted an all-inclusive ticket.

This tracks exactly what airlines at the cutting edge of a la carte pricing, like Air Canada, have learned — fliers love choice. What fliers don't like is being charged extra when they have no other option. That's where they feel nickel and dimed. They don't feel nickel and dimed if they have a clear choice, however.

Consumers want pricing transparency.

At the end of the day, however, travelers’ priority is getting to their destination. By a 10:1 margin, passengers agree that schedules and routes trump available amenities and services.

Bottom line, no matter how the economy evolves, airline fee-for-service models are here to stay.

When it comes to holiday travel and the economy, consumer reaction is mixed. Of those who intended to fly, some are sticking with their holiday air travel plans (20 percent), while others are not (15 percent). Still others remain undecided about whether to stay or go (9 percent). But consumers remain optimistic for 2009 and expect to fly as much or more (63 percent) than they did this year.

The move to à la carte is reinventing the airline retail experience for the first time in decades and creating an opportunity for airlines to deliver real differentiation among their competition and value for consumers.

The phone survey of 2,000 random adults in the U.S. (ages 18 or older) was conducted Oct. 16-20. Completing the survey were 735 adults (366 men and 369 women) who had flown at least once in the last 12 months. The margin of error is +/- four percent.

Full survey results are available at http://tinyurl.com/6nvtag.

 

Airline Futurist • Miami • www.us.amadeus.com

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