23 February, 2010

Airlines have a problem

background information

When you buy a plane ticket you do not expect to have to pay for checking in your baggage or for requesting a particular seat. However, this is what is happening at the moment. More and more airlines are charging passengers for “the extras”. They are doing this in response to passenger’s resistance to higher ticket prices and as a means to become more profitable. Cutting back on extras has been happening for more than two decades, the difference is that in the past it was done gradually and the reductions were minor things that the flyers would not notice.

So the question is whether it is fair for airlines to take advantage of their costumers for some extra profit.

Obviously airlines should focus more on taking care of their passengers. Costumers are in the difficult position of not having much choice when it comes to travelling. Air travel remains the fastest mean of transportation and most the time costumers just have to accept what airlines throw at them. If they do not they have to find another mode that may not be as convenient or decide to not travel at all. It is not right for airlines to take advantage of this situation by trying to charge different sorts of fees and knowing that in the majority of cases costumers just have to accept it. In my opinion companies have an obligation to take care of their costumers and their relationship with them. Airlines are not fulfilling this obligation.

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6 comments:

U1234130 said...

Taking care of your clients is a myth created by marketers, to bind clients towards their services. CRM is just another invention to increase profits. However with price fighters like Ryan air or Transavia and all these others, we as consumers decided it is more important to fly than be treated like kings. If you want to be treated as a king, fly first or business class.

Already many times discussed during lectures: is it morally right when a company or its employees makes the excuse; “we did it all for profit maximization”. The moralist amongst us will agree with your arguments and say companies have an obligation to take care of their customers and that it is wrong to charge something extra. I think the only obligation Airliners have is to bring you safely to your destination.

Since the invention of money and barter disappearing, it is all about profit maximization. Even if profits in the past were a form of security not to go bankrupt, in our moral Western Society “GREED” and taking more from others, is accepted. (Especially in modern day society) The fact is that our capitalist, consumption society created a function in which people and companies are admired if the earn a lot of money.

Therefore it would be hypocrite to say; “that companies who only pursue profit maximization is bad or wrong”. To answer your question: “is it fair that airline company’s charge extra? Yes absolutely, because this is the system we created and agreed upon. Clients accept the fact that they have to pay an extra charge if they want to bring their luggage or want to have priority seating. Only if the majority decides this is morally wrong or law forbids it, a change in operations will happen.

Note: this also applies to many other lines of businesses. E.g. microwave food, we want it cheap, but it tastes nothing like the real food. So consumers are at one end of the spectrum: wanting something cheap and businesses are at the other end: profit maximization. Which is a dilemma.

Unknown said...

Customer is the one that made a choice to do business with you. Taking care of customer is the major task to do business. Both, client and seller have to satisfy over their transaction. I agree that, currently airlines not fulfilling the obligation for taking a good care of customer. An example motives is, what the airlines doing currently now is sell the ticket in very cheap price then adding extra fees at the end of transaction. In my opinion, airlines industry takes many advantages from customer too much without considering the customer’s benefit. Furthermore, as from the lecturer said, we are living in the free market situation, the market we know as a free agent, customer have to be more careful, misled about information might happen, that’s why the market is possible to do bait and switch which are ( for example) attract with the low price, and then they switch to the other offer with reason that the previous offer is not longer possible to get. Moral issue could be happen in this situation. However, Airlines industries also have to mark with regards to subsequent issue whether such practices are permissible.

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Unknown said...

I think the question is not concrete enough. It will be beter to ask is it permissible to charge for the extra fee? Is it right to do so?
To determine wether the extra fee is permissible, you should make distinction between, did the airline company inform you well about the fee or is the company charge the fee without let you know. In this case I think the airline company is permissible to charging for the extra fee and totally fair, because they had informed you before you made the transaction. Finally you are the decider.
It is also morally right, they have the moral reason to do it duo to the interest of shareholders and they have not a moral reason not to do it, because the consumer still have choices to swith airline companies.

Unknown said...

Taking care of passengers is one of the duty for the airline. On the other hand, the airline is a company that tries to make high profit as possible. I think the problem is about asymmetric information from the airline. It is surely disappointing for the passengers that they have to pay more without knowing about it before hand. Otherwise, some companies try to sell the product as many as they can no matter how. Therefore, we, as the consumers, also have to be aware about that. Do not be easily fooled by the advertisements.

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Unknown said...

There is no moral issue in this case. The airline companies do notify passengers (although in fine print) of the extra fees for checking in luggage. They further offer the opportunity to choose a seat for a nominal fee. Finally, some airline companies now charge you for beverages. Consuming these beverages is not compulsory.

In both these cases, they do not oblige the customer to do anything. It therefore cannot be considered a case of morality. It would however be when the companies would not notify passengers of these fees.

When you choose for a discount airline, you choose for the very basics, which is getting from point A to point B. In case you would like more luxury, you should choose for another airline company, who offers more service, but also charges more for their tickets.

Anonymous said...

I think it is better to change the question as “is it morally right for airlines to charge for the extra fee?”

According to business discourse, airline companies try to maximize profit by charging for extra fee. They have morally reason which is to meet the shareholders’ interest. However it is also obligation for airlines to take a good care of customers. If a customer with inconvenient movement and wants to have a seat with more space, however the airlines charge the people for extra fee for the seat. In this situation it is morally wrong that the airlines charge for extra fee. It depends on for what reasons that the airlines request the customer to pay extra. If the airlines have morally reason and inform the customers well what the extra fee about, then it is morally right for them to charge for the extra fee.


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