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From ‘free’ to fee: Acceptability of airline ancillary fees and the effects on customer behavior

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  • Tuzovic, Sven
  • Simpson, Merlin C.
  • Kuppelwieser, Volker G.
  • Finsterwalder, Jörg

Abstract

Businesses in various consumer service industries have begun to unbundle their service offerings by introducing numerous fees for products and services that were previously provided as “free.†Anecdotal evidence in the media indicates that these fees cause widespread public displeasure, frustration, and outrage. This paper develops a framework of fee acceptability, negative emotions, and dysfunctional customer behavior, which is tested using data from the airline industry. Findings identify the strongest effects on betrayal in the case of baggage fees, followed by charges for comfort. Also, betrayal has a direct effect on complaining, whereas anger mediates the relationship between betrayal and negative word of mouth.

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  • Tuzovic, Sven & Simpson, Merlin C. & Kuppelwieser, Volker G. & Finsterwalder, Jörg, 2014. "From ‘free’ to fee: Acceptability of airline ancillary fees and the effects on customer behavior," Journal of Retailing and Consumer Services, Elsevier, vol. 21(2), pages 98-107.
    • Handle: RePEc:eee:joreco:v:21:y:2014:i:2:p:98-107
    DOI: 10.1016/j.jretconser.2013.09.007
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    1. Yazdi, Amirhossein A. & Dutta, Pritha & Steven, Adams B., 2017. "Airline baggage fees and flight delays: A floor wax and dessert topping?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 83-96.
    2. Warnock-Smith, David & O'Connell, John F. & Maleki, Mahnaz, 2017. "An analysis of ongoing trends in airline ancillary revenues," Journal of Air Transport Management, Elsevier, vol. 64(PA), pages 42-54.
    3. Riquelme, Isabel P. & Román, Sergio & Cuestas, Pedro J. & Iacobucci, Dawn, 2019. "The Dark Side of Good Reputation and Loyalty in Online Retailing: When Trust Leads to Retaliation through Price Unfairness," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 35-52.
    4. Chiambaretto, Paul, 2021. "Air passengers’ willingness to pay for ancillary services on long-haul flights," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    5. Park, Eunil, 2019. "The role of satisfaction on customer reuse to airline services: An application of Big Data approaches," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 370-374.
    6. Bougoure, Ursula Sigrid & Russell-Bennett, Rebekah & Fazal-E-Hasan, Syed & Mortimer, Gary, 2016. "The impact of service failure on brand credibility," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 62-71.
    7. Adam Bockelie & Peter Belobaba, 2017. "Incorporating ancillary services in airline passenger choice models," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(6), pages 553-568, December.
    8. Chu, Wujin & Lee, Jeongmin & Baumann, Chris & Kang, Christine, 2020. "Fairness perception of ancillary fees: Industry differences and communication strategies," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    9. Isabel P. Riquelme & Sergio Román, 2023. "Personal antecedents of perceived deceptive pricing in online retailing: the moderating role of price inequality," Electronic Commerce Research, Springer, vol. 23(2), pages 739-783, June.
    10. Johannes Voester & Bjoern Ivens & Alexander Leischnig, 2017. "Partitioned pricing: review of the literature and directions for further research," Review of Managerial Science, Springer, vol. 11(4), pages 879-931, October.
    11. Rouncivell, Adam & Timmis, Andrew J. & Ison, Stephen G., 2018. "Willingness to pay for preferred seat selection on UK domestic flights," Journal of Air Transport Management, Elsevier, vol. 70(C), pages 57-61.

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