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Ancillary airline charges – a storm in a teacup?

An ACTE survey of its US travel buyers reveals some managerial unease on the issue of airlines charging for extras. 29% of the survey’s 300 respondents said they did not manage ancillary charges well while another 51% said they managed them only “somewhat well”. In other words the kind of answers you don’t want to hear at an annual performance review.

The associations report a veritable fury among buyers. In fact the UK’s Institute of Travel and Meetings and the US’s Business Travel Coalition announced plans to create an Industry Solutions Group to develop and build consensus around standards and policies for airline product unbundling. The international industry group will comprise corporate travel managers, airlines, global distribution system representatives, airline alliance representatives, travel association executives and other industry stakeholders.

So. The airlines are a struggling industry. One reason they’re struggling is that there’s depressed demand from business: businesses see travel as an easy place to cut costs whether by merely cutting the cost of a trip or cutting out a trip. So travel buyers – to show more effective startegic sourcing – start incorporating low-cost airlines into their model and some prominent low-cost airlines are still turning a profit while some very big and established legacy carriers post record losses. So those in the sector not doing so well – legacy carriers – look at those that are doing better – low-costs – and low and behold, they decide to adopt some of their policies, namely adding on for “optional” extras.

The result? An international task force to find a solution. Did the airlines create an international industry solutions group to help them when Brent crude nudged $150 a barrel? Why do some segments of the industry cry “partnership” when they strike difficulties while others just go off to find solutions?

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