SUPPLEMENTARY charges could add an extra 29% to the headline price of an average short-haul flight with Aer Lingus once the airline's online seat-allocation fees take full effect in May.
Passengers who book online with a credit card, check one bag and reserve a seat on an exit aisle would add 26 to the average 91 short-haul ticket.
Aer Lingus had been offering free online checkin and seat allocation since August 2006, but on Monday began charging for the seats at an introductory rate of 3. From 22 May, passengers will be expected to pay 15 for exit aisle seats and 10 for seats in the first five rows.
The move is the latest in a series of what the airline calls "online enhancements". Aer Lingus also announced baggage fees in August . . . 8 for each bag checked at the airport, but 4 if checked online. The charge for online check-in has since come up to 5, reducing the benefit of the "online enhancement" by one-third from 4 to 3. The airline said 60% of passengers pay their bag charges online.
This policy of discrete pricing has helped Aer Lingus keep headline ticket prices down while still enhancing revenue streams. Although shorthaul fares rose only a modest 3.9% from 87.60 in 2005 to 91 last year, ancillary revenue per passenger jumped 7.35. Ancillary revenue overall climbed 34% in 2006 and management has said the airline is counting on further "strong performance" in this area . . . hence the new seat allocation charges. "Our business model is to offer the lowest fare and then offer additional optional value-added items, " said commercial director Enda Corneille. "We want to be transparent, honest and offer choice."
While itemisation makes it clear exactly what the passenger is paying for, analysts are bullish about the seat allocation changes precisely because it leaves certain types of passenger with little choice.
"Families in particular will put a premium on guaranteed seats . . . I can see them booking out of fear, " said John Sheehan, airline analyst with NCB Stockbrokers. "Putting a price on it does heighten awareness and creates the fear that if they don't use it, someone else will."
Corneille said that focus group research suggested families and business passengers would willingly pay a premium for guaranteed seat preferences. However, he conceded that charging for a previously free service would reduce take-up from its present 45% level.
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