Austin American-Statesman

Airlines are bundling fees, and passengers like it

- MarthaC. White©2015 The New York Times

As add-on fees make up a growing percentage of airlines’ profits, more carriers are introducin­g bundles of features on top of their base fares — and travelers are embracing them.

On a Delta flight from Dallas to Chicago this year, Paul Clough, an Austin resident who travels frequently, paid $48 to upgrade to a Comfort Plus ticket, which included additional legroom, early boarding, access to overhead bin space — and free drinks. “I don’t like being nickel-and-dimed, you know, paying for everything,” Clough said. “It’s just a couple extra inches, but when you throw in the alcohol and priority boarding, it just makes it more appealing. I call it first-class light.”

After years of consumer backlash, airlines have found a way for passengers to see value in add-ons, even if not so long ago they were included in the price of the ticket, said Jay Sorensen, president of the airline consulting firm Idea Works Company.

“It’s on the rise because it works, it generates more revenue per passenger and it seems to generate fewer complaints as well,” Sorensen said.

Delta spokesman Anthony Black said via email that Comfort Plus was developed to give travelers an option between first class and main cabin tickets. Black said frequent flier members booking through Delta.com “have responded most favorably to our new offering.”

A recent Idea Works Com- pany report noted the growing importance of bundled or branded fares to the bottom line at airlines. Overall, the industry earned more than $38 billion from ancillary revenue last year, the report said, although it did not break out how much was earned from branded fares.

“We continue to see good performanc­e with our branded fares initiative,” Delta’s president, Ed Bastian, told investors on the company’s quarterly conference call in July. “Total merchandis­ing revenues and fees grew by 11 percent, led by incrementa­l first-class revenue growth of 17 percent and Comfort Plus growth of nearly 30 percent.”

Delta is not alone. Jet-Blue introduced its new Blue, Blue Plus and Blue Flex fares this year, which company spokesman Doug McGraw said via email were “designed to offer simple and affordable choices.” They will also be quite profitable: The airline told investors in January that the change would generate over $200 million a year in additional operating income by 2017.

For a traveling public loath to pay fees, it’s a striking shift in sentiment. Behind it, though, is the psychology of consumer behavior, industry consultant­s and marketing experts say.

“The idea here is that people think of losses and gains differentl­y,” said Ishani Banerji, a visiting assistant professor of marketing at the University of Texas, San Antonio. “The same gain will have less of an impact on us than the same loss.”

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