Airlines vary as to which amenities they include in the price of their plane tickets and which ones they sell separately – with the primary goal of optimizing revenue, and for some, wanting to position themselves as a premium vs. low cost carrier. But it is an interesting optimization problem to determine which amenities to include in the price of the ticket and which to offer as an add-on for an extra cost.
What amenties will travelers pay extra for?
In our latest FlightView survey, where over 3,100 travelers responded, we asked which of the following amenities would entice them to pay for an airline ticket that costs $50 more, if the amenity was included in the airfare:
- Opportunity to earn frequent flier miles
- Free in-flight WiFi
- Free in-flight TV
- One free checked bag
- Extra leg room
- Complimentary meal
- Option for mobile boarding
Many airlines charge extra for these amenities – often less than $50 for each one. But interestingly, of the surveyed travelers, 53% said they would pay up to $50 more for their airline ticket, if Free In-Flight WiFi was included. Also, 50% said they would do so if Extra Leg Room was included and 45% would pay up to $50 more if One Free Checked Bag was included. This is an interesting result – these travelers would pay more for a plane ticket if any of these 3 amenities was included and not a separate cost. That is, while some travelers don’t mind evaluating each amenity and deciding whether they want to pay for it, many just don’t want to have to think about it or are simply tired of being nickeled and dimed for everything.
Perhaps this is a message to the airlines? In order to optimize revenue, it may make sense to include one or two of the amenities listed above in a slightly higher airfare.
I can’t say I would argue with this – I recently purchased a ticket for a trip in November. Having evaluated all the alternatives, I settled on Jet Blue because the first checked bag is free and so is in-flight TV. I paid $30 extra per ticket which was about the same amount as selecting one of the alternate carriers and paying for each bag when I got to the airport. But this way, I knew I could pack a suitcase for each member of our family (a decent amount of capacity for us) and avoid the hassle of additional charges when we arrive at the airport. Also, our kids, ages 4 and 9, will have free TV choices without a debate as to whether the amount of time they actually watch it is worth the price. While we may have paid less in the end of we only packed 3 suitcases and didn’t use the in-flight TV at all, the amount we would save is worth the higher probability of our travel day being a little bit smoother!