Ridiculous or not? Airlines are charging their best customers extra to be nicer

By | March 30th, 2011

An offer from American Airlines, which landed in Greg Nieberding’s “in” box last week, looked almost too good to be true.

The airline was offering “five star service” that included meeting him curbside, helping him check in, access to its first-class lounge and pre-boarding.

Just like the good old days.

But it was too good to be true. American wanted to charge Nieberding, a Dallas business owner and elite-level frequent flier, $125 for its VIP service.

“This is the most ludicrous, insulting promotion I have ever received from any company,” he says. “Can you imagine Neiman Marcus or even Macy’s telling customers they are only going to get so-so service unless you pay a premium over the already stated price?”

In a world of airline a-la-carte fees run amok, American’s Five Star Service program is just the latest that is meant to monetize services that used to come standard with your airline ticket.

American, you’ll recall, was the first legacy carrier to start charging for every checked bag back in 2008.

Last summer, it introduced a new program called the Boarding and Flexibility Package that allows you to pay a fee and get priority boarding, offers a $75 discount off a change fee, and lets you standby free for an early flight that day – in other words, a fee to avoid paying a fee.

At the time, Dan Garton, American’s executive vice president of marketing, suggested passengers were asking for these amenities.

“Our customers appreciate value and convenience,” he said.

Five Star Service isn’t new, strictly speaking. It’s been quietly offered at select airports since at least 2008. But it hasn’t been offered to the flying public until now, at least not on this scale. It’s currently available in nine airports, including Boston, New York and Los Angeles, and several international airports.

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Other airlines see a bright future for programs like this. United Airlines, recently merged with Continental Airlines, is rolling out a suite of services called Travel Options by United that includes some of the same features as American’s program, such as lounge access, cutting the line and door-to-door baggage service.

Even Southwest Airlines, with its “no fee” promises, offers a program called Early Bird that gives customers priority boarding and automated check-in for their flight.

These services make perfect sense if you work for an airline. In an industry that has been almost completely “commoditized” – in other words, where one airline is virtually indistinguishable from another – why should an air carrier offer anything but a seat when you buy a ticket?

But among passengers, the perception exists and will probably always exist that flying is more than a seat on a plane. It’s an experience.

Air travelers are understandably upset that many services that used to come with their ticket are now available for a fee. Their aggravation turns to anger when an airline suggests they asked for these changes, and that they somehow “appreciate” the value of these services they used to count on, and for which they must now pay.

Truth be told, a vast majority of air travelers would prefer that services like the first checked bag and being treated nicely by airline staff, be included in the price of their ticket. Elite-level frequent travelers, who have pledged their loyalty in exchange for retaining some of these benefits, are incensed that anyone can now pay to be treated like someone special.

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Nieberding is unhappy, but he thinks Five Star Service, while absurd, is a perfect fit for American.

“It only makes sense,” he says. “They have been giving us two-star service – at best – for years.”

Quite a discussion we had on this one. Even though some of you decided not to take the poll, we had an pretty decent turnout.

(Photo: jbself 20/Flickr Creative Commons)

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