Things in the Sky

As promised yesterday, I’m going to share some opinions of the airlines’ responses to my questions.

First, I was surprised that so many airlines got back to me. In fact, the only airline not to reply was Midwest. It did take a few tries to get in touch with some airlines, but it was good to see that many airlines are willing to talk to bloggers, though some are better than others.

When Continental spokeswoman Kelly Cripe got back to me, she said that the airline “initially tried to avoid baggage fees, the fact is that the consumer gave no preference to airlines not charging them.” That statement made me think of contacting Southwest, since that airline has been advertising it’s lack of fees compared to other airlines.

Paula Berg, Southwest’s Manager of Emerging Media wrote that the airline’s lack of a change fee was one of the “primary reasons for choosing Southwest” for many of Southwest’s customers, especially business travelers. She noted that while other airlines might be earning extra revenues from those fees, they could also lose customers this way. Finally, Berg also wrote that “it will be up to our Customers to decide how they feel about fees. But so far, our strategy is working for our Customers.”

(Side note – I’ve seen Southwest capitalize customers in the past, and I think it’s great that they do so.)

I’m not sure if I entirely believe Continental’s assertion that consumers showed “no preference” for no baggage fees. Continental only instituted the first bag fee a few months after adding the fee for the second. Is that really enough time to determine consumer preferences? I’m not sure.

Another interesting thing I noticed about Continental’s response was that it was said that “the baggage fee became a necessary competitive response,” but it was also emphasized that Continental still gives free meals. Wouldn’t cutting meal service make Continental more competitive with other carriers, too? Apparently the airline thinks free food is better at enticing customers than a lack of bag fees. (A similar argument could be made with any of the other airlines that said the fees keep them competitive, yet differentiate themselves from the rest of the industry in the same e-mail.)

But I think the most important question of all is if the airlines were dishonest with customers in this situation, and I think they were to some degree. Yes, airlines do have to cover costs other than fuel, and revenue from additional fees does help cover them. But, a look back at some press releases from 2008 shows that the airlines often used rising oil prices as a way to “sell” these fees to consumers.

The industry could (and should) have followed the example of Canadian carriers Air Canada and WestJet. Here’s part of a press release from Air Canada announcing the removal of the airline’s second bag fee:

Air Canada announced today that in response to decreasing fuel prices the airline is eliminating all second checked-bag charges implemented this spring and incorporating fuel surcharges into its advertised base fares on North American flights. “Although the cost of fuel remains highly volatile and far above historic norms, the recent retreat in oil prices is enabling us to reinstate our previous baggage policy. We are eliminating the second checked bag charge on North American Tango and Tango Plus fares, reflecting our customers’ expressed preferences. Further, Air Canada is making its pricing more transparent by removing add-on fuel surcharges for flights within North America and instead adjusting its base fares to cover the total cost of fuel,” said Ben Smith, Executive Vice President and Chief Commercial Officer

Meanwhile, here is part of a news release announcing WestJet’s decision to eliminate its fuel surcharge:

WestJet today honoured its commitment to monitor the fuel environment and remove the fuel surcharge if and when the price of fuel subsided. The airline announced the removal of the fuel
surcharge, effective 1 p.m. MT today, in acknowledgement of the recent decline in fuel prices. “The decision to eliminate the fuel surcharge is in line with who we are,” commented WestJet Executive Vice-President of Guest Experience and Marketing Bob Cummings. “The WestJet brand is all about caring, straight talk, trust and best value – our advertising is effective because we walk the talk.”

I think it is fair to say that the decisions by these two airlines helped build up trust with their customers. I’m not sure if the same can be said of the airlines here in the States. There are two noticeable exceptions, though. The first carrier is Southwest, simply because the airline chose to take a different path than many others. The other exception is Frontier. While the airline has maintained its luggage fees for its economy fares, the airline’s new AirFairs program seems to make it very easy for customers to see what they’re getting for their money.