Think elite status, airline reputation or seat comfort matter when travelers pick an airline? A(nother) recent poll puts those ideas to the test and, once again, the answer appears to be a resounding “no” for the majority of respondents. Roughly 50% of travelers indicated unwillingness to pay extra for a preferred airline while three in five were unwilling to pay extra to avoid a middle seat.
But the poll showed 83 percent of Americans put ticket prices among their chief considerations when booking personal travel, outweighing travel perks or an airline’s reputation.
If these numbers are to be believed then the theoretical value of the new Basic Economy offerings – charging $20-40ish more per passenger for benefits like advance seat selection and frequent flyer points – could end up not pulling in as much revenue as airlines hope. Travelers focused only on fare are far less likely to pay the differential.
So how does that reconcile with the positive reports from the “Big 3” US carriers regarding the increased revenue they’re seeing as a result of the new fares?
Read More: Basic Economy isn’t about the LCCs
Read More: American sees big boost from Basic Economy fares
For one thing, even if half say they won’t pay that means half will. And with an average fare hike around $20 (AA specifically said $23, the others didn’t share but I’ll assume similar numbers) even getting half the passengers to pay is significant.
It is also unclear just how much survey results translate to action when the time comes to buy the ticket. Some travelers seem to hold strong on “never again” promises based on whatever slight they’ve endured at the hands of an airline. Most, however, seem to have short memories, especially if a low fare is involved.
Another key factor may come from the survey sample. The report indicates “a sample of roughly 2,316 adults age 18+ from the United States.” Polling was conducted online, not via telephone. But there is no indication from the reports of how likely or how often any of those surveyed are to purchase plane tickets.
Presumably the 50% of passengers that fly at most once a year are likely to consider fare far more important, and with good reason. For the more frequent customers the value proposition of paying a little extra may prove worthwhile, especially if there are on-board product differentiators at play like extra legroom, in-flight entertainment, or better/cheaper wifi options available. But that’s a big maybe.
Read More: United pulls back on Basic Economy
Read More: Basic Economy, real penalties
The math on paying extra up front only works once travelers know that there is a difference and can figure out quickly and easily what the true total cost of a travel experience is, not just the unbundled fare. Figuring out that part of the sales process continues to be a challenge for the industry, even as some airlines adopt the NDC distribution model that is supposed to ease that process.
In the mean time, price remains key for a whole lot of travelers; the idea of airlines spending more to improve the product in the face of such is a long-shot at best.
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funny you mentioned that $23 figure cuz I was looking at NYC-MCO this morning, and the differential was exactly $23, but on UA instead of AA (operating on the dumbed-down assumption that airlines roughly come up with the same estimates of “accretive to earnings” due to BE)
Using public available data on via MIT’s site, I backed out AA’s 2016 mainline narrowbody fleet average stage length being 1,066 miles. LGA-MCO is in the ballpark at 950mi.
ps : DFW-LAS is nearly perfect on the dot at 1,056mi.
I won’t pay for anything…baggage might be the only one
So those of us who DO care about perks, and even are willing to pay (a bit) for them are, by definition, minorities, correct? 🙁
Aren’t the new basic economy fares just the old regular economy fares? There has been no real reduction in price with the basic economy fares, as far as I know. Any extras they sell are now just gravy on top of regular revenue, no?
They won’t pay, then they complain that there’s 29″ seat pitch and fees for checking bags. I’m not sure how you’re ever supposed to make customers happy.
I don’t think the airlines really care if the customers are happy or not…there are only so few and they are banking
To a certain extent, I think they do care. There have been moves the past couple of years, at least domestically, to improve products and roll out enhancements that do increase passenger satisfaction. Testing, then launching, a return of complimentary meals to economy cabin on some transcon domestic flights is a great example, as well as the fact that all three majors have significantly upped the catering game in their domestic lounges from where they were this time in 2014. So, yes, I do think they care in some areas. If they didn’t, they’d probably all look like Spirit when it comes to amenities.
I hafta be honest – unless I get a handful of miles on UA or AA…and I emphasize handful…I almost always buy based on price. You fly a lot more than I do now Steven, but since I gave-up heavy corporate flying, this is the philosophy I have now…and I am the customer that the majors could care less about…so I could care less about them. Give me a cheap fare and leave me alone…ymmv, of course! ????
45 of those 60% will bitch to no end when they get one though.
As soon as I saw this figure today I wondered if the other 17% or 50% are business travelers versus those that only fly once in a while. So say I poll 100 people and 83 say they wouldn’t pay more but they hardly ever fly but the other 17 would pay more but happen to be business flyers that fly weekly it would make a big difference in the long term to me.
Hmm I’d imagine Ipsos would be thorough in getting an accurate sample. I’ll see what I can dig up
Reality, many people only buy 1 R/T a year, and ALL they care about is bottom line price. IFE, lounges, pi… https://t.co/UBiM5iGAws
Passengers want cheap tickets with all the perks. We all want our cake and to eat it too. Eventually the revenues will show what the market can sustain.
I genuinely want an airline that has an option to get sleeping gassed and stacked like cords of driftwood to conserve space, but the tickets get cheaper. Actually, if the tickets stay the same it’s still a deal. Staying conscious while flying is like a punishment now. As opposed to waking up a the destination refreshed for the the day ahead.
Nah, that’s too illegal. I would though.
Makes sense giving the actual ticket sales reaction to even United Airlines treatment of passengers.