I keep digging to find out where the issues lie in the ancillaries debate as so many people seem to be so upset by it.
But really is there an issue or it is more a question of perception?
One of the more obvious questions that gets asked is do passengers like being charged individually for items versus a bundled ticket.
If you ask the vanilla question “Do you like paying for extra services” it is bound to elicit an immediate reaction of “NO”. Or probably more accurately: “HELL NO!”
However I keep wanting to see someone ask the question in context. Such as:
“Would you be willing to pay for an unbundled fare if you could chose a lower price than the bundled services you don’t use?”
I am sure that would elicit a different response.
A recent piece from Bloomberg digs out the usual objections to some of Ryanair boss Michael O’leary’s latest ancillaries ideas.
At the moment he is pushing two ideas. These are: reducing the number/Paying for toilets and offering a very cheap fixed fare - both for short flight standing room only on 737s.
The outcry from “consumer” advocates are the usual anti ones. One comment I particularly like is this one: “He insults the dignity of the flying public every time he opens his mouth,” says Kate Hanni of Flyersrights.
According to the Bloomberg article, Hanni claims to have raised the issue during a meeting with the US Transportation Dept.
DOT officials told her they had verbal commitments in place from all the major US aircraft manufacturers that they will never have pay toilets, she says.
I find this hard to believe as it is the NTSB which has jurisdiction over safety issues. The captain of the aircraft has the ultimate authority over what goes on during the time the aircraft is in service.
But I digress.
The issue is that should the airlines be allowed to unbundle the airline product - and the answer is they should be.
But clearly O’Leary is one bad dude wolf in this. His ripost:
“If you don’t approach air travel with a radical point of view, then you get in the same bloody mindset as all the other morons in this industry: This is the way it has always been, and this is the way it has to be. So nothing changes.”
Clearly he has shown the way to profits in his approach. Indeed some of the most ardent of objectors to the ancillary services model have been the big three legacy GDS companies.
They have been one of the most focused on the business model through their unbundling the GDS segment fee.
Perhaps more germane to the issue at the moment is what the user community thinks about this.
Both the agent community and the GDSs are largely against the idea of ancillaries. I was finally able to get my hands on some data from NBTA during which the topic was hotly debated.
During a session run by Jim Davidson CEO of Farelogix – who is somewhat of a lightning rod on the subject matter – he ran a poll of 125 travel managers who were in the audience.
It provides some good insight into the current issues. What was very interesting to see was where do the pain points lie - ie. what are the obstacles to deployment.
Clearly echoing these comments, one of the big four travel management companies on a panel, Carlson Wagonlit Travel, said:
"From an agency perspective, we're clearly hearing from our clients that there is a definite need to start controlling, or at least being able to understand and control, the costs aligned with some of these fees."
This was from vice president for client services Brian Hace, who later went on to sing the hymn of the need for standards.
From the supplier side, another bad wolf dude is Air Canada. Keith Wallis, manager of distribution business development, said:
"We understand that reporting is a big issue. We did this on dot-com first because that's a channel that we control. Now it's time to do things in channels when you shop. This is just technology grunt work. We can make it happen."
Who exactly is the "we" in his statement could be open to interpretation.
However it does seem to be a large technology issue throughout the intermediary airline supply/distribution chain.
Clearly this is a point made by the audience corporate travel managers who cite integration with their TMCs and their booking engines as one of their highest concerns.
However the GDSs seem to pooh-pooh that position.
“I assure you this is not a technology issue," reckoned Sabre Travel Network senior vice president of marketing, Chris Kroeger.
One of his counterparts at Galileo, Travis Christ, however seemed to politely disagree with him. Travelport Americas president Christ was clearly promoting new some upcoming enhancements by saying:
"I think we're on the cusp over the next few months of a great deal of progress with the new desktop products, new corporate booking tools, etc. There's a lot to look forward to next year."
Perhaps where the airlines have not done a good job is sitting down with their agency and corporate partners and coming to terms with the whole issue both technology and commercial wise.
While some airlines are taking a unilateral approach, I suspect in part because of their frustration with the lack of progress, others are taking a more pragmatic stance and working out some of the more complicated issues with their partners.
Frankly, the objections both outspoken and muttered are rather like the folks on the train in the Abilene Paradox.
I think that once people get their heads around it there will be a real sense that this is not that hard and that some of the most vehement naysayers are those who are fighting change.
So, yes there are clearly a group who are the Luddites in all of this. And they know who they are. For the rest of us – let’s just get on with it.
No big bad wolf, just a way to service the customer/passenger and provide solutions that make sense.
After all you don’t hear a huge outcry of the pricing of automobiles. Nor event tickets where ancillary charges have been the order of the day for many decades.
NB: I will be speaking on the subject at the FVW Kongress in Cologne Germany on September 15th at 14:05.