Business travel

Furious about fees, yet fliers flock to pay them

July 19, 2013 at 10:40 AM ET

You know those aggravating airline fees that everybody loves to moan about? According to a new report from PhoCusWright, it appears we don’t hate them enough to shun them — even when we have a choice.

“The captives are becoming more compliant,” said principal analyst Douglas Quinby, who co-authored the report. “As airlines have added fees, breaking out what used to be baked into the price of a ticket, consumers have become more accepting of the situation.”

The report looked at the growth in purchases of ancillary services, including preferred seating, priority boarding and sales of in-flight meals, movies and Wi-Fi between 2010 and 2012. Among the findings:

  • 40 percent of U.S. air travelers purchased in-flight meals/snacks, up from 28 percent two year earlier;
  • 24 percent paid for preferred seating/extra legroom, up from 14 percent;
  • 23 percent purchased in-flight movies/entertainment, up from 15 percent;
  • 23 percent paid for priority boarding, up from 13 percent;
  • 19 percent paid for Wi-Fi, up from 10 percent.

While paying for preferred seating was not the most popular option, it was the fastest-growing, says PhoCusWright, jumping an astonishing 71 percent. The reason, says Quinby, is two-fold: High load factors and the willingness of frequent fliers to pay to avoid the consequences.

“Frequent fliers tend to be a little more affluent and a little bit more concerned about their overall experience,” he said. “When the plane is packed, you don’t want to be stuck in the middle seat in row 44.”

More surprising, perhaps, was the finding that younger travelers, who would presumably be less affluent, were among the most willing to pay for ancillary services. With the exception of priority boarding, passengers ages 18 to 34 were more likely to pony up for added amenities in every category when compared to those ages 55 and older.

“This generation wants what it wants on demand and they don’t mind paying for it,” said Quinby, adding that many younger travelers don’t have the historical perspective to remember when full-service flying was the norm.

Put the above together — full planes, more selective travelers and an ongoing demographic shift — and it’s safe to say that customer complaints about ancillary fees will fall on deaf ears. With consumers accepting, if not exactly embracing, them, the airlines are reaping billions of dollars that they’re not about to give up.

Furthermore, it isn’t even all about the money, but rather, part of a larger effort to change the dynamic of purchasing air travel from a commodity where a seat is a seat is a seat to one where consumers can pick and choose the services they want to create the experience they desire.

“The revenue is important but the airlines want to get travelers to think about more than just price, price, price,” said Quinby. “They’ve been struggling for years to differentiate their products and the experience they offer. That’s the end game.”

And based on the PhoCusWright report, more travelers are playing along, begrudgingly or otherwise.

“Despite a lot of broad, very common complaints, the airlines have made the right bet,” said Quinby. “The cat’s out of the bag and it’s not getting back in.”

Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him on Twitter.

TOP