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Wednesday, April 16, 2014
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Published: 9/30/2013 - Updated: 6 months ago

Airlines add custom travel plans at a price

New fees, servicesaim to boost revenue

ASSOCIATED PRESS
Delta Air Lines passengers line up to check luggage at Hartsfield-Jackson Atlanta International Airport in Atlanta. Delta customers now have the option to purchase an upgrade that includes a free checked bag, among other perks. Delta Air Lines passengers line up to check luggage at Hartsfield-Jackson Atlanta International Airport in Atlanta. Delta customers now have the option to purchase an upgrade that includes a free checked bag, among other perks.
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NEW YORK — Airlines are introducing a new bevy of fees, but this time passengers might actually like them.

Unlike the first generation of charges, which dinged fliers for once-free services like checking a bag, these new fees promise a taste of the good life, or at least a more civil flight.

Extra leg room, early boarding, and access to quiet lounges were just the beginning. Airlines are now renting Apple iPads preloaded with movies, selling hot first class meals in coach, and letting passengers pay to have an empty seat next to them. Once on the ground, they can skip baggage claim, having their luggage delivered directly to their home or office.

In the near future, airlines plan to go one step further, using massive amounts of personal data to customize new offers for each flier.

“We’ve moved from takeaways to enhancements,” says John F. Thomas of L.E.K. Consulting. “It’s all about personalizing the travel experience.”

Carriers have struggled to raise airfares enough to cover costs. In the past three years, airlines have tried to hike fares 48 times, according to FareCompare.com — 29 times, bookings fell enough that airlines abandoned the increase.

Fees bring in more than $15 billion a year and are the reason the airlines are profitable. But the amount of money coming in from older charges like baggage and reservation change fees has tapered off. Revenue from bag fees in April, May, and June fell 7 percent compared to the same period last year, according to figures released by the government Monday.

So now the airlines are selling new extras and copying marketing methods honed by retailers.

Technological upgrades allow airlines to sell products directly to passengers at booking, in follow-up emails as trips approach, at check-in, and on mobile phones minutes before boarding. Delta Air Lines recently gave its flight attendants wireless devices, allowing them to sell passengers last-second upgrades to seats with more legroom.

And just like Amazon.com offers suggested readings based on each buyer’s past purchases, airlines soon will be able to use past behavior to target fliers.

“We have massive amounts of data,” says Delta CEO Richard Anderson. “We know who you are. We know what your history has been on the airline. We can customize our offerings.”

Other airlines are experimenting with tracking passengers throughout the airport. In the future, if somebody clears security hours before their flight, they might be offered a discounted day pass to the airline’s lounge on their phone.



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