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Airline Baggage Packages May Not Be A Deal

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To keep passengers in the skies, airlines will do just about anything. That was why United Airlines offered a “deal” for checked bags.

According to an article on AOL finance, the $249 annual program allows subscribers to carry on two bags per flight with no additional costs. For frequent travelers who regularly dish out additional money in baggage fees this scenario might be a good bargain. You simply calculate the amount of extra baggage fees you’d pay in a year and see if it’s more or less than $249. Yet, as the article pointed out, perhaps the package is bogus to begin with:

United promotes Premier Baggage as “a great gift for any frequent flyer,” but it’s more likely that most of the airline’s customers won’t get past the bald-faced effrontery of this move. Historically, checking two pieces of baggage had been free. That changed back in June 2008, when United began charging for the first piece of baggage, with the justification was that doing so would help it offset the rising price of fuel. However, like so many of these fees, the charge for the first piece of checked baggage not only outlasted the fuel price spike but managed to actually increase. Now, by offering a yearly subscription rate, the carrier is telling consumers that luggage charges aren’t only here to stay but that United is planning to exploit them as much as possible

One of the most irritating aspects of the new program is that it exposes the airlines’ fee strategy as a very pricey con game. While the new service won’t cover charges associated with overweight or oversize bags, it encourages United’s customers to get their money’s worth by packing at least two bags on every flight. Admittedly, the airline is probably counting on customers to sign up for the program but not actually use it. Even so, United is sending the message that the link between baggage weight and fuel consumption — the very reason cited for baggage fees, overweight fees and other charges — is effectively meaningless. In so doing, it casts a great deal of doubt on its own pricing structure.

Business Process Transformation Baggage

© Flickr user khawkins04

As many have seen and experienced through the current recession, generating business is difficult. Yet, just as important to the success of a business—and just as difficult—is maintaining existing relationships. As we have covered before, situations with business consultants where fees and pricing structures are debatable often frustrate stakeholders.

We’d like to say this situation was the only weird pricing technique airlines have tried, but the truth is far from that.  Various airlines tout themselves as having the best pricing, but with all the hidden fees and random charges, it’s really hard to tell who is ever the best value. No one is ever happy when they think they’re going to be paying one price and the actual charge ends up being far higher than that. But even worse can be when the reasoning given for a certain price turns out to be untrue. While airlines may really have a justification for charging more in fuel with more bags, programs like this cast a serious level of doubt onto those claims.

At AccelaWork, we believe that one of the greatest threats to any new business venture is goals which have lasting, negative effects on current clientele. Of course, maintaining a bottom-line and turning a profit are key to the success of business, but these should not be at the expense of those stakeholders who fund the business as clients. If you’re looking to simultaneously improve business and customer relations, contact our business improvement consultants today.

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