Add-on Fees. Good or Bad?

Below is the headline and lede of The New York Times story about the Ryanair add-on fees uproar that triggered this column:


I no longer have a problem with being charged $25 for a checked bag. TSA personnel, baggage handlers, gas and depreciation for the luggage vehicles—all cost money. Why shouldn’t I pay?

When I grew up and first went into business, the extra airline goodies were fabulous. (See the third image in the media player at right for a sampling of free airline service in the 1950s and 1960s.)

What is the cost of serving meals to all passengers?

In 1987, American Airlines CEO Robert Crandall became famous for ordering the removal of one olive from every salad. Saving for the airline: $40,000 a year.

Why should airlines feed me free? Trains and buses don’t.

Incidentally, on overseas travel, most airlines serve free meals and bags fly free. But otherwise airlines desperately need add-on fees. Here are two quotes from Warren Buffet:

  • despite putting in billions and billions and billions of dollars, the net return to owners from being in the entire airline industry, if you owned it all, and if you put up all this money, is less than zero.
  • How do you become a millionaire? Make a billion dollars and then buy an airline.

Without the airlines, none of us working stiffs would have been able to do business or see the world. The airlines have changed all our lives.


Denny Hatch is the author of six books on marketing and four novels, and is a direct marketing writer, designer and consultant. His latest book is “Write Everything Right!” Visit him at dennyhatch.com.


Publish date: December 10, 2013 https://dev.adweek.com/performance-marketing/add-on-fees-good-bad-using-competitors-fees-your-benefit/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT
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