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Old 26th Feb 2009, 13:04
  #18 (permalink)  
BladePilot
 
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davidjohnson6
Interesting thought process you follow there and I do agree that there are many ways to approach issues and challenges that's what makes life so much fun.
Here's an interesting story for you to consider:
Representatives of a well known Low Cost Carrier (LCC) attend a meeting with the management of a large international airport to discuss a deal which would see the LCC begin using the airport. Much negotiating is done regarding the fees, landing, parking, nav, passenger etc.. The LCC knowing that the Airport Operator is very proud of their new airport shopping mall then drops the big carrot.
They explain that compared to A N Other carrier, the example used being a full service flag carrier their seats are so much cheaper, in fact they are as cheap as a pair of jeans!
A PowerPoint presentation explaining how this difference is achieved is shown to the Airport Managers who by now are almost salivating in anticipation of what's coming the slide highlights all of the so called 'freebies' offered onbaord by the flag carrier which in fact are not free but are actually basic components of the standard fare. Remove those and Hey! Presto! we arrive at the LCC's 'cheap as a pair of jeans' fare, magic
The presentation then goes on to explain that by taking the other carriers standard fare and comparing it with the LCC's fare there is a substantial saving for the traveller, no really? well I never!
So then the hook and bait are cast out. So Mr Airport Manager the traveller now has a pocket full of cash that he/she has saved by buying a seat with us so what does that mean for you? Yes Mr Airport Manager you got it in one they'll have more money to spend in your big shiny shopping mall!
And so to conclude the meeting we're all agreed then that you the Airport Management company will pay us the LCC to bring passengers to your airport because they'll be spending more money in your mall, great lets shake hands on that

The reality is that the majority of travellers who were buying the LCC seat did so because they couldn't afford the other carriers prices so they didn't actually have the 'spare cash' to spend in the airport shopping malls it was all a sleight of hand trick executed with panache by the LCC boys to achieve their goal which was the lowest possible airport charges. If they achieved zero charges that was a bonus and if they managed to get the airport to agree to pay them for 'delivering' shoppers to their sparkly malls then well that's was just the icing on the cake.

The dynamics of fare structures and airport charges can be pretty complex. If an Airport Operator cannot achieve its financial targets using one method of revenue generation it will turn to another. Retail, especially in a reccesion, is too volitiale a revenue stream to be wholly relied on. True to say that less infrastructure such as check-in desks should mean less CAPEX and OPEX but you can't get away from it completely and the Airport Operators will find someway somehow to cover their costs, as does any other business.
I'm all for CUTE airports which offer passengers a choice of methods for check-in and baggage drop but at the end of the day someone has to pay for it and that someone is the passenger.
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