I had occasion to travel by air earlier this month, and I found myself staring in amazement at the array of services being offered for purchase aboard some of the aircraft I was on. Checked baggage fees have become the industry standard, of course, and everyone knows about the food-for-purchase schemes that have so many of us buying and packing our own meals, but my on my flight from Los Angeles to Minneapolis the aircraft was outfitted with onboard Wi-Fi and also had video entertainment terminals set into each seat back. In both cases these are essentially sunk costs – meaning that there is effectively no difference between how much it costs to operate the airplane when these devices are in use and when they aren’t. Give this scenario, you might reasonably think that the airline would offer the use of these services at some minor level, in the hopes of making a lot of incremental income off a high volume of sales. Unless you are already familiar with the U.S. airline industry, of course – in which case you had already realized that the in-flight Wi-Fi was $15 and the handful of games and functions on the seatback unit was $5…
Now, if you travel for business, you may be able to get your employer to pay for your on-board Wi-Fi; you might even be able to justify it to the people in Accounting, assuming that you actually used to it work on something and not just to pass the time playing World of Warcraft. But most people wouldn’t shell out that kind of money on a short flight if they had to pay it out of pocket, and with most passengers already carrying a smart phone, a laptop computer, a tablet computer, a book reader, a hand-held video game system, or all of the above, it seems unlikely that anyone would give you the price equivalent of 5 iPhone games to use a crappy little seatback device for a couple of hours, either. It seemed to me that a better approach would be to use these options as a selling point, in order to sell more tickets and increase customer satisfaction with the service. After all, with passengers already being nickel-and-dimed with all manner of essential (and formerly free) services, there has to be a limit to how many optional fees they will want to deal with…
It wasn’t until I saw this story on MSNBC that the true idiocy of the concept really registered. According to the article, a recent survey showed that only about a quarter of the people flying these days are paying for food, while fewer than 15% of all passengers are paying for in-flight entertainment, onboard Internet services like these, or priority boarding rights. Moreover, each of the four flights I was on this month had to pull a large number of roller-board style carry-on bags and deposit them in the cargo hold, because the overhead compartments have become so clogged with by people trying to avoid the checked bag fees. I think we can reasonably conclude that while the checked bag fees may be making money, they’re definitely not making any friends for the carriers that use them; we can also conclude that if the airlines are pinning their hopes for remaining profitable on these supposedly value-added products (that do not add value because they offer too little and cost far too much) we should probably prepare ourselves for another round of mergers, bankruptcies, and pleas to the Federal government to bail them out of bankruptcy…
It’s all the more annoying, in my opinion, because most of the things you would need to do in order to improve customer relations with airline passengers is already common knowledge, not just in that industry but to the general public – but that’s a post for another day…
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