Study Finds Confusion Over Ancillary Services and Fees

In an ideal world, travelers would like to have a menu of ancillary products and services from which they could make choices, rather than a set-in-stone bundle, according to a report by Nielsen that was commissioned by Switchfly, an airline e-commerce facilitator.

“Would-be passengers don’t just want to book any fare, they want to book the fare that’s right for them,” the report said. “Maybe they don’t have a bag to check but want to have Wi-Fi access and enjoy Internet games in flight.

“Maybe they want to be among the first to board their plane but can do without whatever meal the airline plans to serve.”

But when it comes to making ancillary purchases, consumers tend to buy bundles.

Dealing with laundry lists of products and services is tedious, and consumers are not very confident that they understand the process.

When asked how well they understood “à la carte” service fees, 34% said they understood the process a little, and 20% said they didn’t understand it at all.

That may be why consumers select mid-priced bundles of services over a low base fare with add-ons. It’s just easier to understand and to purchase.

Two favorite ancillary services
Checked bags and preferred seats are the two most commonly purchased ancillary services, which should come as a surprise to no one. They are also the two most common ancillary services offered for sale.

“Everybody is talking about merchandising and personalization,” Jim Davidson, chief executive officer of Farelogix, a company that develops merchandising technology for airlines.

But most airlines are just sticking their toes in the water, he said, starting off with bags and seats because they disrupt airline systems the least. “It’s a process airlines have to go through.”

The most-used service by women (32%) is checked bags  while men’s most frequently purchased ancillary (25%) is preferred seating, according to the Switchfly study. Food and drinks are the third most purchased items.

Wi-Fi access is far down the list. It is far from ubiquitous at this point, but it is also perceived as more expensive than consumers expect.

Davidson thinks airlines should experiment with small bundles created by consumers themselves. They could, for example, pick any three services – a bag, a meal and Wi-Fi, for example—out of five for the same price.