“When did paying for airfares become so unfair?” That’s the opening line in a new commercial that plays on public distaste for the “ancillary” fees that airlines charge for all sorts of services, to make their base fares seem cheaper than they really are.
The airline behind the commercial is Southwest, the world’s largest low-cost carrier and one of the most successful US airlines. Its ad promotes a new slogan, “Transfarency,” proclaiming to the public that Southwest doesn’t charge extra hidden fees like some of its rivals.
“We don’t dream up ways we can trick you into paying more,” the ad stresses. It can be viewed here: https://www.youtube.com/watch?t=1&v=xdHgMX0I0wc
Fortune magazine says the campaign includes a dedicated microsite that showcases the baggage and flight change fees of other US carriers and a “Fee or Fake” quiz that helps flyers spot various airline fees.
“Being a low-fare airline is at the heart of our brand, and the foundation of our business model, so we’re not going to nickel and dime our customers,” said Southwest vice president and chief marketing officer, Kevin Krone, using a good American phrase.
Ancillary revenue is increasingly vital to some airlines. Qantas came third in the world in the amount of money it earned in ancillary revenue per passenger in 2014, a report released earlier this year stated. The amount has risen almost 10% over the previous year.
Qantas earned USD 50.16 per passenger in ancillaries in 2014, an increase of 9.83% over the equivalent figure in 2013. Qantas came third worldwide in ancillary revenue per passenger, behind Jet2.com (USD 56.28) and Spirit (USD 52.35).
The report, from US consultancy IdeaWorks Company in conjunction with CarTrawler, said Qantas earned USD 1,387,084,868 from ancillary services in 2014. That was an increase of more than 9% over the previous year.
The report defined ancillary revenue as: “Revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience.”
In the Qantas case, it is generated mainly by the airline’s frequent flyer program – not through such subterfuges as charging to check in bags. See: Loyalty delivers massive ancillary earnings to Qantas
In the US, carriers are notching up record revenue from checked baggage and reservation change fees. Southwest has abolished those but other US airlines earned USD 1.6 billion from baggage fees in the first quarter of this yea. That’s the highest first-quarter amount since bag fees were introduced in 2008.
Southwest is the only airline left in the US that doesn’t charge for checking in bags.
Written by Peter Needham