Only the cheapest travellers are fighting airline fees

A low-cost, low-fare carrier such as Spirit Airlines makes its living on passenger fees. That those fees, known as non-ticket revenue, dropped by more than $2 per passenger in Q1, compared to a year ago, might suggest a shift in travellers’ tolerance for additional charges. Spirit blames its sagging fee tally on low fares: Travellers seeking out the lowest fares have had plenty of choices, with a raft of bargain flights, some below $50, departing from cities nationwide. Those price-sensitive travellers enticed by the lowest of low prices tend to avoid racking up additional fees. Fare skirmishes have extended to the full spectrum of pricing, aided by the collapse of advance-booking windows for tickets once aimed solely at business travellers. In many cases, buying a ticket to fly the following day is no more expensive than buying one a month early. What’s more, lower fuel prices have boosted airline seat supply beyond demand in many markets, curbing fares for both corporate and leisure travellers. The industry refers to this narrowing as “fare compression.” It has played a central role in airlines’ unit revenue declines and reduced stock prices. Five of the six largest airlines, excluding only Southwest, have experienced share declines of 12 to 19% this year due to the negative revenue news. “In this current fare-compression environment we are seeing consumers who previously wouldn’t fly, now choosing to fly because fares are so low,” Spirit spokesman Paul Berry said. “Many of these consumers are foregoing purchasing optional items.” <br/>