The ancillary revenue is both boon and bane depending on the type of carrier applying it.
So, it is bane for legacy carriers which are already charging high rates for their services. Those air carriers are presumably providing the basic air service plus a reasonable amount of amenities depending on their service philosophies and their market competition. They are not supposed to collect additional charges (ancillary revenues) or otherwise they will negatively affect their brands. For Singapore Airlines to collect additional charge for the emergency-exit row seat is an example of a practice which is on conflict with the brand.
On the other hand, the ancillary revenue is a boon for low-cost carriers. They are presenting themselves as providers of the basic flying services. For increasing their operating revenues, they have to consider ancillary revenues. Of course, collecting the ancillary revenues does not jeopardize their brands as long as they are staying away from asking the passengers to pay for using the toilet.
Putting the nomenclature aside, the reality is that both legacy carriers and low-cost carriers are out there to make money. They are adopting various pricing policies in such a way to make them profitable. Legacy carriers are depending on traditional bundled air fares while budget carriers are depending on a group of unbundled fare components.
Published at http://simpliflying.com
So, it is bane for legacy carriers which are already charging high rates for their services. Those air carriers are presumably providing the basic air service plus a reasonable amount of amenities depending on their service philosophies and their market competition. They are not supposed to collect additional charges (ancillary revenues) or otherwise they will negatively affect their brands. For Singapore Airlines to collect additional charge for the emergency-exit row seat is an example of a practice which is on conflict with the brand.
On the other hand, the ancillary revenue is a boon for low-cost carriers. They are presenting themselves as providers of the basic flying services. For increasing their operating revenues, they have to consider ancillary revenues. Of course, collecting the ancillary revenues does not jeopardize their brands as long as they are staying away from asking the passengers to pay for using the toilet.
Putting the nomenclature aside, the reality is that both legacy carriers and low-cost carriers are out there to make money. They are adopting various pricing policies in such a way to make them profitable. Legacy carriers are depending on traditional bundled air fares while budget carriers are depending on a group of unbundled fare components.
Published at http://simpliflying.com
No comments:
Post a Comment