8. Carey, Airlines to Load On More Fees, 2011 (Price Strategy)

8. Carey, Airlines to Load On More Fees, 2011 (Price Strategy)

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Airlines to Load On More Fees After Checked Bags, Carriers Seek to Charge for Early Boarding, Fancier Foods and Reclining Seats By SUSAN CAREY March 7, 2011 Airlines are digging around for ways to pile on more fees. In recent years, airlines from AMR Corp.'s American Airlines to Spirit Airlines Inc. found new ways to boost profits—and annoy fliers—by charging fees for checked bags, selecting a choice seat or other services once included in ticket prices. Now they're mulling and testing various new fees for services that never were part of a ticket: Want a seat that reclines more? A pre-ordered champagne brunch in coach? Insurance against a blizzard that waylays a trip? Access to speedy security lines and early boarding? Soon you might be able to get them all—for a price. Airlines started charging for checked bags, snacks, pillows and other items in a big way in 2008. Last year, such fees brought in an estimated $22 billion, or 5% of global industry revenue. Carriers could tap into "billions and billions of potential revenue" says Tom Douramakos, chief executive of GuestLogix Inc., a Toronto technology supplier that helps airlines sell products and services. "The airlines are only scratching the surface" with baggage and seat fees, he insists. They could become virtual shopping malls, offering captive travelers a variety of buy-while-they-fly items such as theater tickets or a handbag, he says. Two small, low-fare carriers, Spirit and
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/02/2011 for the course MARK 11420 taught by Professor Cox during the Fall '11 term at University of Houston.

Page1 / 2

8. Carey, Airlines to Load On More Fees, 2011 (Price Strategy)

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online