Home World Why booking directly with airlines can be more expensive

Why booking directly with airlines can be more expensive

by News Desk
0 comment

Early in the pandemic, many travelers experienced headaches trying to rebook air travel purchased through third parties such as Orbitz and Kayak. Overloaded customer service centers and ever-changing airline policies have wreaked havoc on these agencies, leading many travelers to book directly through the airlines to avoid future problems. .

But now that the pandemic has calmed down and travel has started to return to normal, air passengers are experiencing a different reality. Booking directly through an airline involves a maze of fees, extra offers and confusing seat selection. As a result, the checkout price is often higher (much higher) than the advertised price.

The issue has become so controversial that even President Biden has entered the fray. “You should know the full ticket cost when you’re comparison shopping,” he said at a press conference announcing the new news. Ministry of Transport initiative Force airlines to disclose these charges. “So you can pick the ticket that’s actually the best deal for you.”

Efforts to keep airline prices down are nothing new. The Obama administration attempted to enact similar regulations but failed. And until meaningful changes are made, the burden will be borne by the airline’s customers, especially when purchasing through the airline’s website or app.

era of fees

Since the rise of low-cost carriers such as Spirit and Frontier, US airlines have dramatically changed the way they make money. Airlines are increasingly looking to “ancillary revenues” such as surcharges, credit card reward programs and seat upgrades, rather than earning profit margins on competitive airfares themselves.

Between 2019 and 2021, ancillary costs as a percentage of total revenue for major U.S. airlines rose 6 percentage points, from 16.1% to 22.2%, according to a report by aviation industry report firm IdeaWorksCompany. This follows a steady increase in fee income dating back to at least 2007.

Bottom Line for Customers: Saving money on air travel depends more on the add-ons you can avoid at checkout than on the base cost of the ticket itself. While some of these add-ons are relatively easy to avoid, such as carry-on baggage fees, much more complex decisions, such as the difference between basic economy and regular economy (or “main cabin”), can be made. There are some things that can go down.

Priority mismatch

There’s a simple reason airlines want their customers to book through their websites and apps. Because they tend to spend more money on incidentals. In filings with the Security and Trade Commission, American made this priority clear, citing its reliance on third parties, such as online travel agents, as a potential risk factor.

“We also rely on the capacity and willingness of these distribution channels.

To expand our ability to share and collect revenue on ancillary products (e.g., select seat pricing),” the filing read.

Basically, American Airlines admits that it makes a lot of profit from incidental charges, and I worry that third-party sellers won’t push these charges aggressively. That’s what gives knowledgeable customers the opportunity.

Third-party services have an incentive to clarify rather than obscure these choices for customers, explains Melanie Fish, a spokeswoman for third-party travel booking platform Expedia. .

“When purchasing a flight on the app, travelers select a fare and what the airline includes in the price of the ticket (such as seat selection, cancellation or changes) and, if applicable, checked baggage charges. We can confirm,” Fish said. on mail.

choice between Basic Economy and Main Cabin Fares shows an example where airline interests and customer interests are not aligned. Airlines want to promote their cheaper basic economy fares in search results and persuade shoppers to upgrade to more expensive main cabin fares at checkout. without making comparison shopping difficult. Online travel agents can clarify these differences and save their customers money.

“Travelers can scroll through the different fare choices available, including Basic Economy, Economy and more, to see all options, costs or add-ons side-by-side, making it easy to choose the fare that best suits their needs. ‘ explained the fish.

Of course, online travel agents have their own incentives to add extras like car rentals and travel insurance. Therefore, customers should be aware of additional charges even when booking through these platforms. However, airlines continue to impose incidental charges and travel booking platforms show flight costs up front in search results. Despite the increasing incentives, travelers can save money by booking through a third party.

______________________________

This article was provided to The Associated Press by personal finance website NerdWallet. Sam Kemmis is a writer for his NerdWallet. Email: [email protected]

methodology

The 2022 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany examines 75 airlines’ disclosures for each of the 12-month accounting periods 2021 and 2019. Ancillary income is defined as income beyond the sale of tickets that is generated either through direct sales to passengers or indirectly as part of the travel experience.

Ideaworks company. (September 2022). 2022

CarTrawler Yearbook of Anciary Revenue by IdeaWorksCompany. https://ideaworkscompany.com/wp-content/uploads/2022/09/2022-Ancillary-Revenue-Yearbook-1.1.pdf

Related Links:

NerdWallet: Basic Economy vs. Main Cabin: Cheap or Convenient, Not Both https://bit.ly/nerdwallet-basic-economy-vs-main-cabin

Federal Register: More Transparency in Airline Ancillary Fees https://www.federalregister.gov/documents/2022/10/20/2022-22214/enhancing-transparency-of-airline-ancillary-service-fees

Nerdwallet’s Sam Kemmis, The Associated Press

You may also like

Leave a Comment

Copyright ©️ All rights reserved. | Canadian Trends