Alaska Airlines considers fee for choice seats

THE next time that you book an air ticket, be aware that the fare may not come in the usual package when you last travelled. And I’m not talking about just budget carriers, known for their add-on model that charges a base rate and customers pay additionally for options such as meals. Full-service airlines (the appellation is becoming a misnomer) have adopted this same principle to beef up revenue.

Some legacy carriers are already charging for meals and in-flight entertainment. More airlines have followed the United Airlines example of levying a fee for checked baggage. Singapore Airlines levies a fee for preferred seating with more legroom. And now Alaska Airlines is considering going down that same road, considering a fee for “choice seats”.

Ancillary revenue has become a significant source of boosting profitability for these airlines – as if it is really a new income stream for providing new and additional services to their customers. According to Alaska Airlines CFO Brandon Pedersen, this amounts to about US$300 million annually for the airline, 40 per cent of which is derived from checked baggage. He felt Alaska Airlines was somewhat a laggard in the game. Mr Pedersen said: “We recognize we haven’t done as much as other carriers… We think there is more to do here.”

Alaska Airlines is even considering upping its checked baggage fee from US$20 to US$25 for the first bag – to be in line with the industry norm – and why when it looks like many passengers will travel with at least one checked bag? At the current rate, this is already contributing US$120 million annually.

Lest it be too hasty, Mr Pedersen warned that Alaska Ailrines’ major rival Southwest Airlines does not charge passengers for checked baggage. So how far can Alaska Air go before its customers decide to switch allegiance?

What next, you may ask, and wish for the good old days when the airfare was less complicated and entailed certain basic services without your having to stuff down an early meal before boarding or agonize over what you should throw out of your only bag that is allowed as a carry-on?

Indeed, competition is the air traveller’s last bastion of hope for a fair fare deal. And it behooves upon the authorities to ensure that that stays alive and is not abused through collusions and fare-fixing. Airlines should know that what has happened in recent times is that travellers have become more conscious of the numbers. And that more of them are shopping around than they used to, especially when the product becomes increasingly uniform and the only reason for travelling is to get from one point to another.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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