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March 14, 2013

Shady Airlines and Shady Pricing Strategies

by JenniferTsai

Recently, while booking my flights to GIE, I was transferred from Kayak.com directly to jetstarasia.com.  As a rather apprehensive online shopper (I am only slightly paranoid about the security of online transactions and getting my identity stolen….), the thought of purchasing an expensive item (flight ticket) from a little known, foreign website and airline which I had never previously heard of made me feel very uneasy. However, being that all of my other options for one-way tickets from Thailand to Singapore were from equally obscure airlines (i.e. Tiger Airways and Scoot), I decided to take my chances.

 

As a very cautious online shopper, the first red flag came up when a message popped up while being transferred to jetstarasia.com, stating that my flight fare would be quoted in THB (Thai Baht). Not that there’s anything wrong with that (I must sound like an arrogant American), but purchasing flights online in a completely unfamiliar currency made words like “sketchy” and “shady” come to mind, words that I wouldn’t want to associate with my purchase experience of an expensive item (expensive for me is >$100). Good thing that nowadays it only takes two seconds to Google “2999 THB to USD.”

 

Anyways, after selecting my desired flight itinerary, I proceeded along with the purchase process through to entering passenger information. So far, so good. That was, until I hit the baggage check section, which allowed me to choose from an array of different baggage fees, depending on the weight of my checked baggage. Now, don’t get me wrong, I am very used to having to pay extra fees for checked bags. However messages such as “Charges will apply for excess or oversized carry-on baggage at the airport” (with the italicized words in red) and “Adding checked baggage after booking costs a lot more” (with italicized words in bold), as common sense as they are, made me feel as if I was being forced to check my bags now. Not knowing what weight my baggage was going to be (and not being too comfortable with measurements in kg), and faced with options that jumped 400 THB per additional 5kg, I just randomly picked one, hoping that I wasn’t being swindled. Red flag #2.

 

I continued along to the next section– seat selection. Here’s where the third red flag came. I had the choice of paying an additional fee to reserve/preselect a seat. That’s fine, but closer examination of the fine print showed me that paying this additional fee didn’t even guarantee that I would receive my selected preference.  In Jetstar’s words, “Jetstar will attempt to accommodate your seat preference, however due to operational considerations cannot guarantee that your seat allocation will be as your selected preference.” So if I paid an extra fee, I could reserve a seat, but it wouldn’t be guaranteed. If I didn’t pay a fee, I would be randomly assigned to whatever seats were still available at check-in. What a headache.

 

The cherry on top came on the final stage of the booking process, under the payment section. After entering my credit card information, a new “booking and services fee” was dumped on me (a charge applied to all credit cards except for the Jetstar MasterCard), in addition to a new message:

 

“The airline does not guarantee it will be able to carry you and your Baggage in accordance with the date and time of the flights specified. Schedules may change and flights may be delayed or cancelled for a range of reasons including but not limited to bad weather, air traffic control delays, strikes, technical disruptions, network changes and late inbound aircraft. Flight times do not form part of your contract of carriage with us. Please ensure accurate passenger details are provided in step 3 of the booking process so any changes can be notified. To the extent permitted by law, the airline excludes liability for any costs, expenses, losses or damages incurred by the Passenger as a result of failure to meet a schedule. Travel insurance is recommended.”

 

I’m not sure if these terms and conditions are the same or as explicitly stated during the booking process of JetBlue or another American airline, but I was extremely frustrated by this point. I felt as if I had been lured into selecting this airline because of its cheap flight fares, but then had several separate charges and fees dumped onto me that made the end price not so attractive. It’s true that my final flight cost was still pretty decent, compared to what I’d pay for a flight from IAD to JFK, but the purchase process itself made everything seem so sketchy and non-transparent.  As mentioned by one of the HBS articles on pricing strategies, partitioning prices to highlight  benefits can fail miserably when consumers “sense that sellers aren’t being straightforward about the total cost.” Not only that, but partitioning prices to highlight standard features (such as baggage check and use of credit cards for online purchases) rather than competitive advantages really worked against Jetstar.

 

Conclusion: I purchased my flight, which cost me about 1,300 THB more than the original stated price ($35 USD). While the added fees were by themselves not that much, the purchase experience made me resentful and angry towards Jetstar. My advice to low-cost airlines who want happier consumers? BE UPFRONT ABOUT YOUR COSTS!

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