Travelers who value cheap travel options, whether cheap airplane tickets, cheap vacation packages, or discount travel packages, will need to tread carefully in 2013 when deciding whether to purchase bundled services being increasingly offered by airlines, sometimes at a discount.
Select airlines are allowing customers to create their own bundles of service. For example, some airlines have started giving passengers the choice of a checked bag, a seat assignment, priority boarding, a lounge pass, or a meal with travelers being able to select two or three at a discount prices.
Typically if two or three optional services cost $30 as standalone choices, then airlines may bundle them for $25.
Other bundling possibilities airlines are looking into include offering travelers annual airport club memberships that come with such add ons such as four onboard Wi-Fi sessions.
Airlines are working on assigning their passengers value scores based on their frequent flyer status and other variables. Ultimately pricing for various services, including bundled options, may vary by customer.
Carriers are looking into more segmentation of their offers. For example, instead of all Platinum frequent fliers being offered the same specials, one customer may be able to check all bags for free, whereas another customer may only get the first bag free.
Experts believe airlines may begin to charge checked bag fees on factors such as flight distance vs. todays practice of charging the same bag fee on all domestic flights.
Ancillary services, that come with fees, amounted to slightly over $36 billion in 2012, equal to 5.4 percent of their global revenue.
The following are the most widely charged fees for optional services today, in descending order:
Baggage
Seat assignments
Unaccompanied minors
Pets
Travel Insurance
Medical Insurance
Lounge passes
Upgrades
Meals and beverage
Ground transportation
Experts expect to see an expansion of the number of seats airlines define as premium/prime that require an additional fee to access. Eventually only middle seats may be classified as non-prime.
Air Canada and Delta have started offering customers reduced ticket prices for passengers opting out of earning frequent flyer miles or getting seat assignments.
With airlines seemingly running out of ideas of how to charge more for existing services, they are expected to turn to bundling as a way of raising additional money and cutting expenses (such as doing away with frequent flier miles and seat assignments) as a way of reducing costs.
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