Chipping away at ancillaries, or Pringles and the premium flyer

Pringles.gifThis ancillary revenues stuff seems simple until you crunch the chips, er, numbers. At least that’s the view of one of the best-selling popularisers of the dismal science. Steven Levitt, co-author of ‘Freakonomics: a Rogue Economist Explores the Hidden Side of Everything’, has gained a real following. This book has been a bestseller for a couple of years, and Levitt, who teaches at the University of Chicago, and his coauthor, award-winning journalist Stephen J. Dubner recently had an interesting posting on their blog.

Dubner flew in business class on Northwest Airlines, and, being in the airline’s version of premium class, was offered a full dinner. Dubner told the flight attendant that he’d decline the dinner, but could he please have a package of Pringles, the potato chips that come stacked in a little tube.

He’d heard the cabin crew offer the crisps for sale to the coach cabin for $2 a tube. His request perplexed the flight attendant greatly, and she pondered the matter for a while and then decided that Dubner would have to pay $2, just like everyone else who was buying them. Dubner asks that if insisting that a premium passenger pay was such as good idea and adds, “It should be said that my Pringles didn’t arrive for about 45 minutes, and only after I asked for them again. The flight attendant looked really surprised that I still wanted them after all that time. I guess Northwest didn’t want my $2 all that badly”.

Dubner’s posting drew the usual condemnations of Northwest, including one from the guy in Detroit who says he wants to move so he doesn’t have to fly on the carrier, to the people who blamed the flight attendant, to the flight attendant who gave him a clear explanation. And there’s even the economist who suggested that Dubner perhaps increase the size of his sample from one. The general theme, though, seemed to be that Northwest really did need and want his $2. Though we aren’t questioning the intelligence of anyone who turns down airline food., an award-winning journalist like Dubner should have been able to understand the issue: ‘for sale’ means for sale and in any case, 37 Northwest internal auditors and supervisors would have put the flight attendant on the rack and accused her of grand theft-snack if she’d given away some crisps to a high-flyer. And we’re certainly not suggesting that Dubner has a chip on his shoulder, er, lap, about having to wait for the cold crisps. Still, Dubner raises a point: Northwest plans to increase its ancillary revenues from $13 million in 2004 to $102 million this year; Delta just set up a spot on its website devoted to selling up and selling add-ons. Other carriers have similar lofty plans. But many also see the future as one in which class consciousness or at least class separation remains a fact of life. So what happens next time something like this happens?

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