web Musings of The Global Traveller

Tuesday, March 14, 2006

User Pays, or Phone/Sales Office Surcharges

In this day of user pays it seems everything has a cost and that cost is often passed directly onto the consumer. For example many banks want you to use online and automatic teller machines, and charge extra for using facilities at bank branch. Fair enough if it is more efficient electronically, in my view it is fine to charge extra for other methods of getting the same service as an encouragement for the consumer to help reduce costs.

Some airlines also have user pays, in that online paid tickets get lower fares than using phone or sales office. Some airlines even provide a lowest price online guarantee, although the ones I have seen (eg British Airways and Air New Zealand) have some onerous terms that make it hard to claim the guarantee - see a Flyer Talk discussion of British Airways' Price Promise for example. But I digress. These discounts for online bookings are, I think, fair enough. The consumer has a choice in the method of booking and is incentivised to choose a lower cost channel - everyone wins.

Some airlines also charge more for awards booked over the phone than those booked online. This I have difficulty in accepting. Most frequent flyer programs' online award bookings are limited to own metal, certain origins and destinations, limited routing or stopover option complexity, etc. If you have no choice but to use phone to make the award booking then why should the consumer be penalised for the lack of online functionality? How much do these airlines collect in extra mileage cost or $ surcharges for not providing online functionality to book the full range of awards on offer? Doesn't this create a perverse incentive for the airline/frequent flyer program to not improve their website? I dont think that is right.

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