For more than a decade now, the commercial aviation industry in the United States has been even more competitive than ever imagined. Major fleets have found it difficult to increase their profit margins in a world where the price of fuel has consistently increased.
Industry observers probably remember the hullabaloo when major airlines such as Delta first began to increase their bag check fees. The spike in fees was widely adopted by the major players, and it gave budget airlines a place to thrive in the industry.
Don’t look now, but it seems like fees are on the rise again. The Washington Post recently reported that the rise of fees was responsible for a revenue increase of nearly $8 billion for major airlines between 2012 and 2014!
(Amazing, right? Read more here: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/05/chart-the-rise-of-extra-airline-fees-on-everything-from-carry-ons-to-leg-room/)
It seems more and more people are begrudgingly paying those fees as employment improves in the U.S. and discretionary income for travel increases. However, smaller specialty fleets that find ways to cut costs can stand to benefit from improved PR.
Not only that, but smaller fleets could capture an outsized market advantage, in terms of both cost control and customer service, if the price of jet fuel continues to decline with the cost of oil.
If you’re a big carrier, then improved fees make sense — but they are not winning any friends. If you’re a smaller carrier, though, you have the flexibility to take a different tack with customers.
It is an amazing — and potentially lucrative — time to be a small or mid-sized carrier!
Fees Have Been Climbing, But There Are Signs Of Hope — Leverage Them With Covington
What does it mean when major commercial airline fees are climbing, but the price of aircraft fuel is showing signs of dipping for the first time in a long time? Simply this: There are some truly great business opportunities out there.
Commercial aircraft passengers recognize that ticket prices are on an upward trend while fuel prices are down. Aerial fleets that have their operations in order stand to benefit from a whole new world of customers while still retaining their existing loyal clients.
To make sure that you are positioned to make the most of innovative opportunities, be certain you are fully confident in your aircraft engine maintenance. Covington provides you with outstanding service so you never have to worry.
Call or email us to find out more about what we can do for you.