Allegiant Air Ups Their Ancillary Fees

Posted by Seth Miller on August 21, 2012 at 6:24:41 PM EDT | Post a Comment
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Fees to check a bag. Fees to pick a seat. Fees to board early. And, now, fees to pay for your ticket. Welcome on board!

It is no secret that airlines see ancillary fees as the key to profitability these days. The opportunity to up-sell, cross-sell, or just sell at passengers during the purchase cycle is one which few airlines are overlooking. Some carriers are more aggressive than others in finding ways to drive revenue from these fees. Spirit Air and Allegiant lead the pack and now Allegiant is tacking another fee onto purchases: a charge for using a credit card on purchases.

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Technically this isn't a fee; it is a discount for purchasing with a debit card on their website. Because of this, it is not disclosed on the government-mandated schedule of fees that the airline publishes. It is, however, disclosed on every flight search page, assuming the customer is looking for it. The US Department of Transportation requires that the full price be listed on all fare searches and Allegiant is complying with that, assuming the use of a debit card for payment.

Clicking on the link to the fine print about the "debit card discount" offers up some additional details which should have consumers concerned. In exchange for the $4-6 discount per passenger in each direction customers will be forgoing the protections built in to purchases made with a credit card. These protections include covering the customer should the airline fail to deliver on the purchased transportation for any reason. Losing this protection is a strong motivator for paying the extra few dollars. At least it should be.

Looking at the Allegiant financial statements it seems that this "fee" could very quickly increase the company's revenue numbers quite significantly. They've been around $32 per passenger according to recent filings. With more than 1.7 million passengers flying in a quarter and more than 90% of those buying tickets online it isn't hard to see how this fee adds up to millions of dollars of extra revenue quite quickly.

The airline maintains that customers are able to pay a low base fare and then add on only the services they actually need, keeping the total price as low as possible for everyone. If the total fares really are lower anyways then not such a big deal. In the end, however, this makes it harder for customers to compare the real costs of the transactions and there is nothing good about that.

Photo credits: Allegiant Air via Shutterstock

Posted in Airlines, News Tagged: Airlines, News, Air Travel

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