Heat From the Seat: Study Says Airlines are Capping their Revenue Models by Forgetting About the Customer

(Dive Travel Business News - March 29, 2011) -- "Heat from the Middle Seat: The U.S. Consumer Perspective in Air Travel" a new study released by travel industry research firm PhoCusWright,  reveals that less than half of U.S. air travelers feel positive about their airline experiences. While traveler attitudes toward airlines are lukewarm overall, consumers report feeling worse about their airline experiences versus a few years ago, PhoCusWright says. Consumer attitudes towards their air travel experiences have soured over the same period that airlines have added baggage fees and other new charges.

PhoCusWright found that 38% percent of leisure-only U.S. travelers feel slightly or substantially worse about their airline experiences compared to a few years ago, while just 13% feel slightly or substantially better.

Affluent and business travelers increasingly feel like they are being taken for a ride by airlines, according to PhoCusWright. Both business travelers and affluent travelers (i.e., those with an annual household income of US$100,000 or more) are less likely to have positive sentiments toward their flying experiences and more likely to have negative sentiments. Among business travelers, 40% feel their experiences have gotten worse. The downward trend in customer satisfaction is particularly pronounced for affluent travelers, who are nearly twice as likely as travelers with annual household incomes of $50,000 to have slightly or very negative sentiments, according to PhoCusWright.

"Fliers are essentially giving airlines a grade of C+, which is barely above satisfactory," said Carroll Rheem, director, research. "But even more concerning for airlines is that their most valuable customers – business travelers and those with higher annual household incomes – are even less happy than the average."

In addition to checked baggage fees, airlines are aiming to increase sales of optional services like preferred seating and priority boarding. These new products and packages represent a tremendous opportunity for airlines. However, the decline in traveler satisfaction could limit their ability to fully realize that opportunity, the new report says.

"Consumers are inherently reluctant to buy more services from companies they feel are taking advantage of them – and unfortunately, many feel that way about airlines today," said Rheem. "Airlines have therefore put a ceiling of their own creation on the potential success of optional services. If they focus on repairing relationships with their passengers, airlines have the ability to break that ceiling. Whether or not they have the inclination remains to be seen."

PhoCusWright says. “Airlines have therefore put a ceiling of their own creation on the potential success of optional services. If they focus on repairing relationships with their passengers, airlines have the ability to break that ceiling. Whether or not they have the inclination remains to be seen. As airlines seek to minimize distribution costs and boost earnings with new, bundled services, the consumer perspective remains a crucial – but often overlooked – success factor."

Visit PhoCusWright.

** This RSS Feed is brought to you by www.DiveTravelBusinessNews.com **