Posted by: David Kiley on May 27, 2008
There is much hub-bub over American Airlines’ $15 fee for a checked bag, and the PR fallout with consumers.
PR fallout? That would presume that the airlines had any credibility at all with consumers and business travelers in the first place.
When I hear that businesses have difficulty passing along rising fuel costs to consumers, I scratch my head. What do people expect when they see gas rising above $4.00 per gallon? Do they think the price of corn flakes going by their cars on the highway in a tractor trailer truck paying even more for diesel fuel isn’t going to go up?
American is charging $15 per checked bag rather than nosing up ticket prices for a few reasons. Business travelers on whom they depend hardly ever check a bag, so they are unaffected. Even if they do check a bag, they don’t care because it doesn’t add up to enough money for most companies paying for business travel to care.
This is a move to soak non-business travelers, and discourage people from over-packing, thus reducing weight.
It is a canard to think that most people choose airline flights based on price when the price between two carriers is within $50.00. People choose flights based on where they have frequent-flyer accounts, and by schedule before they start quibbling over $15.00 or even $50.00. Because, even in hard times, time is worth more than the money. Try and book a flight based on your time needs, and you would be extremely lucky to find more than one caarrier choice. True, if you have some time flexibility, you might have a choice. But more often than not, you get backed into a flight choice based on scheduling.
Here is a bit of the chatter on the issue at Skytalk.
Weber-Shandwick is allegedly American’s PR counselor. Here is a memo, for which I am not going to charge.
Dear Client: Instead of instituting a fee for checked bags, which will be a lightning rod of bad publicity, please consider burying the cost of rising fuel in across-the-board ticket price increases. Consumers understand that many consumer prices are rising because of increasing fuel costs. What they don’t like, or understand, is when companies begin charging for items they have previously gotten for free—a single checked bag, a soda, a bag of chips, a WiFi connection, etc. The best solution to this problem is to stay out of the news, not to lean into it and ask for a pie in the face.