Low fares may end up costing more than airlines think
Jetstar, Australia’s newest low cost carrier, offered 5000 fares for just five cents in a move to draw the spotlight away from Tiger Airways launch on the Australian domestic network. However, shadowing this move is the threat that Jetstar may be investigated over the way they treat their customers under the Fair Trading Act. (11/22/2007)
Jetstar has received a disproportionate number of complaints from its customers – 39% of all airline complaints between 2004 and 2006 involved Jetstar. Many came from their rigid enforcement of terms and conditions such as that customers who fail to check in 30 minutes before are denied access to the flight and forfeit their fare.
‘Most airlines have similar contract terms and conditions, however the volume of complaints suggest that Jetstar is more rigid in enforcing these rules.’ Consumer Affairs Victoria’s annual report read, it continued ‘Jetstar has shown reluctance to resolve complaints when contacted.’
Although an isolated case, it shows that customers who pay for ‘no-frills’ fares can expect a certain level of service and will be supported in getting it. It also spells danger for airlines that believe a low fare constitutes appalling service, Jetstar spokesman Simon Westaway defended the airline by saying there was ‘flip side’ to cheap tickets and that ‘the conditions of carriage and how we promote those conditions on our website are very clear,’
One thing has become clear from this case: cheap flights will invite more complaints due to the lower level of service and customers used to expecting more. To ensure that airlines do not alienate customers it is important to consider them throughout the pricing and unbundling process.