If you thought airlines weren’t following a secret playbook when they dumped a truckload of new fees on you this year — if you thought all of this was just part of their corporate DNA — then you might want to think again.
It turns out there are places where travel companies go to learn this stuff. Two upcoming conferences help the travel industry invent and apply new fees and then give them the tools to convince customers that this kind of corporate behavior — and the new surcharges in particular — are good.
The first is the Ancillary Revenue in Travel conference, which is part of the Travel Distribution Summit North America conference. The meeting is designed to help travel companies understand the “challenges and opportunities of adding high margin ancillary products to boost your profits.”
How is it possible for European LLC Ryanair to squeeze an extra €7 from every customer and grow revenues by 18%? Low Cost Carriers globally have discovered the high margins that ancillary products offer, now it’s your turn to take a cut of the profits.
Ancillary revenue is on the rise and incorporating it into your business model is essential to the growth of your business. First quarter reports showed ancillary revenue profits to get excited about, second quarter reports showed you unbelievable stats that you just cannot ignore.
The conclusion is clear: ancillary revenue works! But with new regulations in Europe and the complexity of integrating partners offering it can be a minefield to offer these high margin products.
If that doesn’t make your stomach turn, this will. The Worldwide Airline Customer Relations Association, a trade group for customer-relations workers in the airline industry, is holding a conference that makes the perfect companion to the revenue-enhancing event. It helps customer-relations managers make the fees go down easier.
Among the speakers is Tom Murphy of New York’s Fordham University, who promises to help airlines achieve what he calls the “Resiliency Edge.”
His research into the impact of stress on airline employees has led him to develop a practical, hands-on program which gives front-line workers the tools to manage stress and deal with difficult situations.
Nothing against Murphy, but surely some of these “difficult” situations include passengers who are upset that they have to pay extra for anything that isn’t bolted down on the plane.
In an perfect world, no one would attend a conference that gives companies ideas on how to deceive and infuriate their customers. In a perfect world, a meeting of airline customer service managers would prominently feature a customer advocate like Kate Hanni.
Needless to say, this is isn’t a perfect world.
(Thanks to Alan for the tip.)
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{ 7 comments… read them below or add one }
Great stuff!
Hey Chris,
Aren’t you going to this wonderful conference? I’d love to see some good articles on this.
Anyone old enough might remember Bob Newhart’s first album (“Button Down MInd”) which contained a track about the Grace L Ferguson Airline & Storm Door Company.” He talked about the airline reducing cost by eliminating non-essentials such as “seats … and landing gear.” This was in the early 60’s – did he nail it or what?
@Jasper I strongly doubt they would let me darken the door of either conference. But I agree … it would be interesting to blog these shows.
@ Chris: Just sign up under your name and profession: travel expert and mediator. Do you really think they’re filtering mechanism with all annoying journalists on it? They don’t lie and get their way. You can play that game too!
A recent poll was done to identify if travelers who favor Jet Blue would be receptive to the $7 pillow and blanket fee…the result was a resounding “NO”!
I find it hard to believe that flyers in the United States will pay for ancillary products. You see it every day on the airplanes…People bringing food onboard instead of purchasing that nasty sandwich..
And fees for headphones have been dropped and fees for sodas are negativly viewed.
I for one, do NOT make purchases onboard!
One of the things I found disconcerting was a recent connecting flight on an international roundtrip ticket. After landing in the US after flying 15 hours from an international location, the stewardess came down the aisle hawking something that I wasn’t paying any attention on…and it occured to me…I didn’t have any U.S. currency…How could I pay for any onboard products? All I had on me were foreign currency…That’s when I discovered that this bit of selling stuff onboard was not very well thought out…
Ed
web/gadget guru
BTW: the reason why ancillary stuff works for Ryanair, is that they charge next to nothing for your flight. Check the website: London – Ibiza: 10 pounds. Liverpool – Gdansk: 10 pounds. Including taxes. Good luck getting a $15 flight from Baltimore to Portland OR. Or New Haven-Miami.
Many folks do not understand the reason why Ryanair and Easyjet make billions. They are brutally honest about their business plan. You pay next to nothing, you get next to nothing. Customers get that as fair, especially since they’re back-up by EU reimbursement legislation in case their flight gets canceled or delayed. Having paid $15 for a ticket, people don’t mind chipping in another 15 for a bag.
American carriers think they can do the same after charging you $300 for a ticket and the. surcharging you $75 for fuel non-sense, and finally adding in a bunch of random taxes and a booking fee.
And worse, they’re surprised it doesn’t work.