US ultra low-cost airline Allegiant Air will embark on a natural progression in its product unbundling strategy when it starts charging passengers $5 for boarding passes printed at select airports on September 1.
Allegiant joins ultra low-cost airline Spirit in charging a fee to customers that opt for agents to print out their boarding passes at airports. Spirit introduced a $5 charge in 2012, and upped the fee to $10 in 2013.
Allegiant also followed Spiritʼs lead in charging customers for carry-on bags starting in 2012 after Spirit debuted the controversial fees in 2010. Frontier Airlines, which is transitioning into a full-fledged ultra low-cost carrier, also began charging passengers for carry-on luggage in April of this year.
For Allegiant the main drivers in creating the new charge were cost savings and driving more passengers to its mobile phone application that allows travellers to check-in for flights, add seat assignments, receive their boarding pass on a phone or tablet and upgrade to priority boarding.
“In our destination markets, where you have a lot of scale, that is certainly the motivation to hopefully have a lower labor expense and maybe lower ticket counter expense,” Allegiant president Andre Levy recently explained to analysts and investors. “In the smaller cities, itʼs probably a little bit harder to see cost savings, because you still need a certain number of folks to turn the airplane, whether youʼre printing boarding passes or not, but we do think overall there is some cost savings to be had.”
Levy stated that Allegiant has been evaluating the new fee for printed boarding passes for quite some time “to modify behavior of our customers”. But the airline wanted to ensure the proper infrastructure was in place to accommodate customers using mobile boarding passes. In January of this year, Allegiant touted it had mobile boarding pass capability available at TSA check points in all 101 airports it served, and that it had purchased scanners for use at 55 of those facilities.
“Weʼre going to continue to encourage our customers to either print their boarding card at home, or download our mobile app and check-in on the app and go through security that way,” Levy stated.
Allegiant has not outlined any specific revenue targets from the new charge. In broader remarks outlining the companyʼs goal of growing ancillary revenue Levy simply declared: “Weʼll see what the effect of that [the new boarding pass fee] is.”