Good news on nickels and dimes

The latest wrinkle on the low-fares model has been the trend toward ancillary charges, asking passengers to pay forcoins_bl.gif a meal, for a pillow and so on. Some carriers such as Ryanair or Allegiant rely on these charges and indeed on sales of rental cars, hotel rooms, and other extra services as well. Some flyers call it ‘nickel and diming’. At the legacy carriers, a few such as United and Northwest have experimented with asking people to pay extra for their choice of seats and so on. United’s Economy Plus, a section of coach where then seats have a little more legroom, brings in fair amounts of revenues. Even though some flyers grumble about the charges, the old-fashioned airlines may end up being right.

If a survey by Travelocity is a guide, this is the way of the future: some 62% of the people surveyed by the big on-line travel PicForNewsletterTedSep2004SEATS.jpg service said that more legroom was most important amenity, and some 42% said a guarantee of their seat choice was the next most important. And the overwhelming majority – almost 97% – said they were willing to pay for their choices. About half the people said they would not pay more than $10 and about a third of the people said they would pay between $10 and $20. That’s interesting news for the network carriers, because what they are trying to sell is what people say they want. The other things people want – guarantees that they won’t get bumped, cheerful, attentive staff – fall somewhere farther down the list of things they’re willing to pay for.

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