Most of us applauded when the low cost airlines first arrived on the scene. I say “most of us” as I am sure the management of various flag carriers were not very happy.
For the first time the customer could see a full break down of the fees they were paying – cost of flight, airport taxes, credit card fees and others. They really drove innovation in a what was a cabal orientated and stagnant industry.
What do we have today? Well, they now use this “innovation in transparency” to start playing “the shell game” with consumers and over-charge the un-suspecting. The cheap airlines, understandably, will phrase this in other ways (or at least their PR machine will).
Examples I have come across (names withheld to protect the “innocent” although you can see an old personal blog entry on the subject here):
- when booking a return flight, the return leg is more expensive than if booked separately
- when booking with children, the fare is more expensive than without children
- debit card fees are marked up 1000′s of percent (I believe 5-10% of one airline’s profits are card processing fee mark-ups)
So, why am I discussing this on a Foreign Exchange site?
Well, our industry has traditionally relied on opaqueness to hide margins from customers (e.g. in forward points, not having a central “pricing venue” for smaller transactions etc.).
The industry is now at a point where we need to go through the “transparency phase” – which, I am proud to say, is a move we are championing (see here) and getting great feedback from customers.
What we must learn from the “shell game airlines” is not to become what we set out to change.