Everyone talks about getting more money from the passengers. Airline thinkers have spoken and speculated for a long time about the a` la carte model of airline faring and pricing, and a few carriers have begun to adopt this philosophy; RyanAir, Aer Lingus, and Air Canada have shown it works. It does bring in money, and one carrier, Allegiant Air, told Airline Business's Network 2007 conference this week that its business model is based on ancillary revenues that it brings in by unbundling the traditional all-for-one-price vacation package model. Allegiant's chief executive Maurice Gallagher told network that the carrier derives almost $19 per passenger in ancillary revenues, from such add-ons as a hotel room or rental car.
Now a fairly significant low-cost carrier, Spirit Airlines, has taken the step in a little different direction with what it calls "a customised travel experience". The South Florida-based low-cost carrier, which serves some 30 airports in the US, the Caribbean and Latin America, now offers its "Standard Ultra Low Cost Carrier" product and its new menu of options. http://www.spiritair.com
Both menus come in the company of much lower fares, fares that will be as much as 40% lower on many longer distance and international routes. Starting in mid June, the airline will charge for seat preferences in its BIG FRONT SEAT program, charging for all checked bags and for anything people eat or drink on board (beyond water). People who book on line will have to pay $5 for each of their first two checked bags while those checking in at the airport would pay $10 a bag; and after that, a third, fourth, or fifth bag will costs $100 each to check. Right now, Spirit allows a first checked bag for free and charges $10 for a second checked bag. The carrier, which started out in wintry Detroit but moved to South Florida in at the turn of the century, will also offer discounted airport parking, travel insurance and other services - for a fee. This is the farthest any US carrier has taken the concept, says consultant Bob Mann of R.W. Mann and Associates. He says, "If the Southwest model was exported to Europe to inspire RyanAir, then this represents a reimportation of the RyanAir thinking to the US". Mann notes that American Eagle had tried charging a dollar for the traditionally free soft drink on flights within California but gave up on the program, while America West, at the time it was integrating the US Airways system and taking on its name, considered imposing a charge for kerb-side check in of bags. Even though passengers may very well resist paying for a soda or coffee, the larger a` la carte thinking is here to stay, he says. http://rwmann.com