Start Up Blog

‘Oh, by the way’…pricing & fuel surcharges

The latest trick of many airlines is to segregate elements of their product cost

 

        Introducing the “Fuel Surcharge”

 

Apparently this provides pricing transparency. Thanks Mr Airline, but we know the price of oil is rising. 

 

 

Isn’t fuel a fundamental input cost for airlines? (30%)

Do they think we care what their input costs are?

Do they realize that we’d rather the total price – no tricks?

Do they know it reduces ‘trust’ in their brand and industry?

 

And just to show my total disdain for fragmented and aggregated pricing here’s a few questions I’d like to propose to the airline Industry:

 

Does Nike have a shoe lace surcharge?

Does Ford charge extra for the steering wheel?

Does Coke have an aluminum can surcharge?

Does Nokia charge extra for the buttons on the cell phone?

 

Fuel is not an ‘optional extra’. So work it out, include it and charge us a price. That’s what business is…. Businesses are meant to be working this stuff out to reduce the complexity in our lives. That’s what business does.

 

No wonder airlines have the highest business failure rate of any industry, and the worst profitability of any Industry in history. (which by the way is a net negative over the past 100 years)

 

Start up blog says: Consumers hate ‘Oh, by the way’ charges. Avoid them at all costs.

4 Responses

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  1. Ross Hill said, on May 25, 2008 at 11:55 am

    When it comes to flights we just want the cheapest flight, so if someone goes adding things like fuel in BEFORE the checkout it makes it too expensive and scares people off.

    Look at the trend – we pay for more luggage, we pay for food on the plane, we pay for our carbon offsets, .. we pay for fuel because that’d be useful too!

    You can buy a Nokia phone for $0, but check out the surcharge on that!

  2. dr.dre said, on May 26, 2008 at 11:03 am

    My understanding of why the big arilrines itemise the surcharge (along with Taxes etc) is so they can impose it upon those users not paying for the basic ticket – i.e. the up to 10% pf people of an a flight cashing in their frequent flyer miles. It now costs upwards of $600 to take a free flight on miles to some overseas destination from Australia.

    That doesn’t justify the practice, but it does explain why it isn’t rolled into the initial ticket price.

    I get equally (and more frequently) angry with the ludicrous “booking fee” charged by concert ticket agents – surely the whole booking process is what being covered already in the process? Or am I to believe tall of the face value price of the ticket of the money is going to the artist/promoter?

  3. Tom said, on May 27, 2008 at 5:21 pm

    it’s like tipping, aussies just want one simple price

  4. Fight Fuel Surcharges said, on July 29, 2008 at 5:37 am

    I think fuel surcharges and higher prices for everything we buy is something we all will have to get used to. We see it in every industry. There is no way that gas prices will drop to 2005 standards in the near future…or ever, for that matter.

    Businesses that are passing the freight fuel surcharges on to their customers need to
    look at new ways to recapture those costs and pass the savings on to their customers,
    by not having little “suprises” like fuel surcharges.


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