Thursday, January 31, 2008

Will Ryanair Charges Change Travellers Behavior?

While I have not taken any flight aboard its planes, Ryanair is a corporation that I have lots of respect for because it has perfected a mechanism to ensure air travel at very competitive prices. Part of the strategy appears to be that it keeps the flights very simple and saves customers from paying for the style that goes with flying and thereby only provides a seat and minimal entertainment and snacks during flight.

A story here shows that the corporation has introduced the idea of charging for luggage that its passengers carry onto flights. The plan is to allow only a single piece of luggage and to resort to punitive charges in a bid to alter the behavior of its customers. As the story states, the rates applied for extra luggage could surpass the amount paid for the ticket itself.

In spite of complaints from consumer organizations quoted on the piece, the express announcement that the airline intends to ensure that there is little luggage to transfer to the hold is defensible. Its easy to see that for a lower budget airline, quicker turnaround times added to a low staff costs are immensely significant factors. It would be worthy of assessment whether consumers in the future opt to travel light and save money or simply take up the costs. Travellers would have to consider the value of carrying three bags onto a flight across cities. While I am unsure about the determination of the price, one can see that someone in this corporation knows that incentives can be used to change behaviour. It may be that passengers fail to respond in the expected way but for as long as they do not travel with a competitor, this may be a welcome revenue stream. Flights may be run inexpensively but perhaps not so for luggage. I am sure that competing airlines are observing this very keenly.

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