Covid-19 has rendered baggage and change policies obsolete
Travel is returning and airlines have an opportunity to improve the experience for consumers and bring more critical revenue to their bottom lines. The essential elements of baggage policies and change fees had simple beginnings, but over time the quest for more revenue has created a structure poorly equipped for the Covid-19 era. In addition, the pandemic requires new sensitivity when developing revenue-producing plans. This report describes how this can occur for airlines in the categories of change fees, baggage policies, and the overall process of boosting airline revenue.
A CarTrawler-sponsored report encourages airlines to innovate and build revenue during the pandemic and period of recovery. The following are some of the findings:
• Allegiant’s Trip Flex sells flexibility as an a la carte service typically priced at $29 or packaged with branded fares. Trip Flex features a $0 change fee and is estimated to produce revenue of nearly $11 per passenger.
• Delta generated revenue of $5.11 per passenger in 2019 from a traditional change/cancel policy which charges $200 to $500 for some reservation changes.
• Ryanair bundles a large carry-on bag and personal item with early boarding to achieve smoother passenger loading without overhead bin headaches and estimated revenue in excess of $6 per passenger.
• Southwest doesn’t charge change or cancel fees but counts on better passenger loyalty to create financial results that have been the envy of the industry.
“As consumers look for reassurances, at CarTrawler we’re working with our suppliers to make sure we’re highlighting additional efforts in place around cleanliness and consumer safety. We’re also working with our partners to actively merchandise these product improvements to address any consumer concerns,” said Aileen McCormack, Chief Commercial Officer at CarTrawler. “Across the travel industry, businesses are planning for the return of travel and what this may look like in the short- and medium-term. As we collectively navigate these uncharted waters, an emphasis on innovation is vital for future success. These innovations need to be consumer-focused to create changes that will work to support our continued recovery as well as encouraging the revival of travel.”