retail news in context, analysis with attitude

by Kevin Coupe

The Los Angeles Times has a story saying that one airline industry expert is saying that he believes that major airlines will soon move to a "dynamic pricing" model for all those extra fees that passengers have to pay these days. For example, this would mean that during the holiday season, instead of paying $25 to check a bag, you'd have to pay more.

In fact, it has already begun - Spirit Airlines charges more for checked bags between December 18 and January 25, saying on its website that the move is designed to "'encourage customers to pack a bit lighter' to make room for more bags during the crowded holiday season."

Airlines for America, a trade association, says only that "the marketplace, and more specifically customers, decide every day what they are willing to pay."

Sorenson says that while there may be initial pushback, consumers will learn quickly to accept and pay the increased fees.

I'm not so sure about that. Accept and pay the fees, maybe … but I have to wonder if out of some kind of arrogance born from lack of competition - and what often looks like de facto collusion - the airlines are doing irreparable damage to their brand equity. It just seems as if they do less and less to prove any sort of loyalty to the consumer. Sure, they have frequent flyer programs, but they make them less and less rewarding and less and less accessible to their customers. But they also raise their fees whenever costs go up, but last time I checked, they rarely lower them when costs go down.

I think it is a cautionary lesson for any marketer, for any brand.

This hasn't come back to haunt the airlines. Yet. But such behavior inevitably does, usually in the form of a competitor that decides that a little disruption is in order. When it happens, it is an Eye-Opener … but it sometimes is too late to do much about it.
KC's View: