Car­ri­ers face back­lash for paid ser­vice

The Korea Times - - BUSINESS - By Nam Hyun-woo [email protected]­re­atimes.co.kr

Do­mes­tic low-cost car­ri­ers’ (LCCs) moves to add charges to ser­vices that used to be free is draw­ing a back­lash from con­sumers, as they re­duce free ser­vices while main­tain­ing ticket prices, ac­cord­ing to in­dus­try an­a­lysts, Mon­day.

Car­ri­ers said the move is a way to im­prove their profitabil­ity and ex­pand the va­ri­ety of in-flight ser­vices they of­fer, but con­sumers com­plained of re­sult­ing in­con­ve­niences as they end up pay­ing al­most the same amount as full-ser­vice car­ri­ers charge when they in­clude sev­eral nec­es­sary ser­vices.

Ac­cord­ing to Air Bu­san, the Bu­san-based car­rier will stop pro­vid­ing free in-flight meals for its in­ter­na­tional flights from April 1.

Apart from night flights in­bound to Ko­rea, Air Bu­san has been of­fer­ing light meals such as sand­wiches and bur­ri­tos for in­ter­na­tional flights longer than 2 hours and 30 min­utes.

In­stead of free meals, Air Bu­san will in­crease the num­ber of meals avail­able for cus­tomers to buy from seven to 10.

“Along with the paid-for meals, we are con­sid­er­ing putting charges on bag­gage ser­vice and emer­gency exit row seats,” an Air Bu­san of­fi­cial said. “By do­ing so, the com­pany is seek­ing to raise the share of paid ad­di­tional ser­vices in the to­tal sales from 5.5 per­cent to 6.5 per­cent this year.”

This is in a stark con­trast to the car­rier’s pro­mo­tion in 2008 when it be­gan its op­er­a­tion. In a 2015 in­ter- view, the car­rier’s CEO Han Tae-keun high­lighted its free meal ser­vice as one of the com­pany’s ad­van­tages over its ri­vals, say­ing “free meals lower con­sumer bur­den by 5 per­cent to 10 per­cent.”

Air Bu­san’s move­ment is the lat­est of do­mes­tic LCCs’ strate­gies of putting prices on ser­vices they used to of­fer for free.

Ko­rea’s first LCC Jeju Air has been putting charges on in-flight meals since 2013 and ex­pand­ing paid ser­vices, such as bag­gage, seat des­ig­na­tion and tick­et­ing through the call cen­ter. Fol­low­ing Jeju Air, T’way Air, Eas­tar Jet and other LCCs also started to put ex­tra charges on such ser­vices. When Air Bu­san scraps the free meal, five out of six LCCs ex­cept for Jin Air will be pro­vid­ing paid meals only.

Con­sumers ar­gue that the LCCs’ move is tan­ta­mount to a ticket price hike.

“Isn’t it a com­mon ex­pec­ta­tion that the ticket price should go down when they pro­vide fewer ser­vices for free?” said Park Eun-young, 33, a Seoul-based of­fice worker who took her win­ter hol­i­day us­ing an LCC flight. “As long as the LCC ticket price is the same, con­sumers will only think of the ex­pan­sion of paid ser­vices as a trick to hide ticket price hikes.”

“Many con­sumers think do­mes­tic LCC tick­ets are not that cheap com­pared to do­mes­tic full-ser­vice car­ri­ers or for­eign LCCs,” an avi­a­tion in­dus­try of­fi­cial said ask­ing not to be named. “When com­pared to a Seoul-Jeju route, for­eign LCCs price their tick­ets at around 50 per­cent of that of full ser­vice car­ri­ers. Do­mes­tic LCCs are just 10,000 won to 20,000 won cheaper.”

“Though LCCs’ ex­pan­sion of paid ser­vices are in­ter­preted as their tac­tic to im­prove profitabil­ity, con­sumers will rec­og­nized them fair only when the ticket price is ad­justed ac­cord­ingly,” he said.

Han Tae-keun Air Bu­san CEO

Lee Seok-joo Jeju Air CEO

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