Passenger Reaction
Airlines can differentiate their product and potentially boost their revenues by "unbundling" the travel experience by charging separate fees for services such as checked baggage and beverages served on board. Low cost carriers such as easyJet and Ryanair have generated significant profit from ancillary revenue. However, the consumer backlash from charging fees (for services included in the price of a ticket by other airlines) can damage a carrier's reputation. For example, "European Skyway Robbery" was the headline written by noted travel columnist Peter Greenberg to warn consumers of abusive overcharging for baggage fees in Europe by easyJet and other carriers. The world's largest carriers are not immune from the public backlash against aggressive ancillary revenue actions. British Airways also wanted to boost its ancillary revenue with higher baggage fees during 2007. The carrier eventually backed down after the public outcry became too great. These have led service-conscious airlines towards seeking ways to increase ancillary revenue without hurting their brand.
Read more about this topic: Ancillary Revenue
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