American Airlines has launched a public relations campaign to convince the flying public that paying $15 for the first bag checked is a deal. Unfortunately, the airline has to scramble with a lot more than only pricing.
AA has responded to the list of problems we noted in an earlier post — more passengers hauling carry-on luggage, longer lines at Transportation Security Administration inspection points and delays at boarding gates collecting the $15 fee.
Their public relations statements seem out of touch with reality and the changes that AA is pursuing according to their releases will end up costing more than they will collect for some time to come. In the not-so-short run, this initiative doesn’t look like it will add to the bottom line and may irritate passengers enough so that they will book away from American.
They begin the defense of the $15 charge with a statement that initially, “more than three out of four of American’s customers actually will not be charged the first bag fee.” American Airlines confirms that approximately 75 percent of its customers have already purchased tickets for their summer travel prior to June 15, meaning they will not be charged the fee.
Ironically, their first defense that most travelers will not be affected is more of an argument against implementing such a foolish fee rather than a supporting line of reasoning.
Further down their in their supporting claims, American surprisingly states their intent to deceive customers with this fee hidden from consumers reserving flights. The airline’s talking points noted, “If AA were to raise fares by $15, it would be moved to the bottom of the search results in today’s era of online shopping and significant market share would be at risk if other airlines didn’t match the fare increase, which often can be the case.”
I hope that the new government regulations forcing airlines to only advertise airfares with all fees, surcharges and taxes included are promulgated as soon as possible.
So far only United Airlines, that hasn’t met a fee it didn’t like, has said they are “studying the fee.” American still doesn’t have the computer systems in place to deal with the new fee when booking are made and is working feverishly to figure out how to collect the money at the airport counters, curbside check-in and at the jetways — not a simple programming, accounting, collection and record-keeping challenge.
Here is list of American’s projects, underway or planned, to allow it to collect this new $15 baggage fee according to Mark DuPont, American’s vice president of airport services planning:
• new training of employees
• additional employees to be assigned after the fee takes effect to deal with anticipated problems
• new software to handle collection of the baggage fees by agents
• new software to allow collection of the baggage fee by self-service kiosks
• new programs to handle an expected increase in carry-on bags
• new procedures to deal with luggage when the overhead bins are full
• new overhead bins to accommodate more carry-on luggage on future planes
For a fee that sounds so simple, the integration of the people and systems needed to bring it to fruition will gobble up any anticipated income. Add everything up and this $15 baggage fee seems like a policy that will initially cost more in absolute dollars and cents as well as in terms of priceless lost good will and passenger loyalty than any increase in revenues.
• Less that 25 percent of the passengers will have to pay the fees (perhaps even fewer when elite frequent fliers, business- and first-class passengers are exempt)
• AA is risking chaos at the check-in counters and kiosks, at boarding gates and in security lines
• AA needs to schedule additional workers
• AA needs more IT support and risks launching a fee collection package without the normal beta testing time
• AA plans on eventually reconfiguring overhead bins to deal with the anticipated onslaught of carry-on baggage
• TSA will have to add personnel (another hidden fee paid for by the taxpayers)
• The FAA will eventually rule against AA’s plan to hide the fee from online travel agency customers until the last minute.
From my point of view, this is a fee too far.
Finally, Dupont, quoted in an MSNBC.com article puts everything into perspective and clearly illuminates how American Airlines feels about the importance of customer service and their passengers’ needs,
“If this is the wave of the future, you’re going to have to ensure that the compartments meet the needs of our customers,” He said. “That will probably be on our to-do list.”
Imagine, customer service on the “to-do list.” What’s new. At least now we know where we stand in the pecking order.
{ 1 comment… read it below or add one }
This is going to be a mess. We do need the regulations to force all of the airlines to show their fees inclusive of everything.
Basically, everyone is going through all of this fuss and inconvenience (and wasted time) because American wants some extra money and doesn’t want it to show up on the search engines lest they lose their spot.
These are all just stupid games played by people running companies that are unable to make a profit.
Now they are going to waste a bunch of people’s time and still not make a profit.
I’m certainly going to steer clear of American until it is seen how this plays out – and it is not over the $15, it is over the lost time and inconvenience.