All inclusive air fares in M'sia - being transparent to consumers

[yeadrian 0]

Transparent air fares – consumers’ right

http://biz.thestar.com.my/bizweek/story.as...amp;sec=bizweek

 

 

THE time is right for Malaysia to implement an all-inclusive pricing for the airline sector.But it has to be strongly regulated so that all airlines follow the rules. It would be healthy for the industry and good for consumers as travellers will no longer be hoodwinked into exhorbitant fares. Airlines are always advertising their fares. Some fares are advertised at misleading rates as they are without the taxes, administrative charges and even fuel surcharges. But when you add all the extras in, the actual price of the ticket varies drastically from what is advertised. Invariably the travellers end up paying much more than what was advertised.

 

Take the example of a RM10 fare offering. No doubt, it looks attractive and it is savings for the consumer to pay only RM10 for a fare to a certain destination. But when you actually add on the extras such as fuel surcharge, taxes, administrative fees and so forth, the RM10 fare would have swelled to say RM150 or even RM200. This is grossly misleading the customer.

The time is right to accord more clarity for consumers who are generally feeling the pinch of the credit crunch currently. People are more conscious of their spending power and are keen to look for value deals. Airlines can help travellers find the best deals easier if the packages come with an all-in pricing.

 

All inclusive pricing means what you see is what you pay for. There are no hidden charges, no extras as all the other permutations of fuel levy, taxes, insurance and administrative fees are lumped into one pricing so that when a fare is advertised, it is the actual fare for a trip from one point to the other.Having the add-ons only serves to confuse the customer. Transparency should prevail as this will make it more convenient for the traveller to make his purchasing decisions.

 

Singapore implemented an all-inclusive air fare pricing regime on Nov 1.

All travel advertisement in that country must include the true cost of travel, including add-ons like airport taxes and fuel surcharges. This allows the traveller to know at a glance how much his air ticket will cost.

 

This new ruling is issued by the Advertising Standards Authority of Singapore. The European Union is in the process of implementing an all inclusive pricing. New Zealand was the first country to introduce the all inclusive pricing for air fares and now it is even mandatory in Australia.Air passengers in India are demanding that airlines be more transparent in their fare pricing and not mislead consumers with cheap offers in their advertising blitz. These are some of the countries that believe customer protection is key. They do not want travellers to be misled by very cheap air fares.

 

All-inclusive pricing can be for one-way or return trips and it allows the customer to chose the deals that best fits his budget. In Malaysia, the Malaysian Association of Tour and Travel Agents (Matta) has been pushing for an all-inclusive pricing concept to be implemented. To be fair, they just started on it and even though some airlines have implemented that on some sectors, it is generally done on an ad hoc basis.

 

What is needed is a mandatory regulation for all airlines operating in this country. Whether it is the Government who should mandate it or the advertising association, it must be done. The Malaysian traveller cannot be allowed to be duped into exhorbitant pricing for long.

 

 

And what the Airline bosses say about it : -

http://biz.thestar.com.my/bizweek/story.as...amp;sec=bizweek

 

Datuk Seri Tony Fernandes

Group CEO of AirAsia Bhd

“That is a new thing and it is the right way to go. We at AirAsia are studying the possibilities to include the administrative fees into basic fares. (AirAsia abolished fuel surcharges over the week). Such a move will make consumers better understand the fare structure. But we certainly are not going to include taxes in our pricing. That has to remain separate as some airport charges are very high and that money in airport taxes do not go to us.’’

 

 

Kavin Martinus Country Manager for Malaysia

Jet Airways

“We started offering all-inclusive air fares for our KL-Chennai flights the past two weeks. This all-inclusive air fare is only for the Malaysian market and is not system-wide at Jet Airways. Jet has not implemented any such strategy for other markets. We are trying it out and if need be we will take the step forward to have all our air fares inclusive of all charges as there is clarity in the pricing for the consumer. Just at a glance, the consumer will know how much he (or she) will pay for his journey.’’

 

 

Datuk Bernard Francis

Senior general manager sales

Malaysia Airlines

“We are keen to have all-inclusive air fares but it should be across the board. If every airline does it, we would also follow. We have had some promotions with all-inclusive air fares and found it to be very popular. It is a requirement in some countries but not in Malaysia. The consumer will benefit as he will know what they are getting in ringgit value when they purchase an air ticket. That would be the price they pay for the entire journey and it is important not to mislead consumers with all kinds of sales blitz.’’

 

 

Couldn't agree with this direction more!

 

[Ashmil Abd Ghani 0]

Datuk Seri Tony Fernandes

Group CEO of AirAsia Bhd

“That is a new thing and it is the right way to go. We at AirAsia are studying the possibilities to include the administrative fees into basic fares. (AirAsia abolished fuel surcharges over the week). Such a move will make consumers better understand the fare structure. But we certainly are not going to include taxes in our pricing. That has to remain separate as some airport charges are very high and that money in airport taxes do not go to us.’’

 

Sometimes I can not understand this think..What is administrative fees about??from my understanding, it include insurance cover to passenger..If it so, why it be called as "administrative fees"..Previously I was thought that fee only applicable for those who were brought the ticket from counter, but my presumption was wrong on that matter.. As far I now this fees still new, around 2 to 3 years been introduced..Sorry if what I write here is wrong..

[yeadrian 0]

Administrative fees is a revenue to the Airlines, its a different form of "surcharge" in other terms only

 

An example - Previously hotels publish their rates as "plus plus" (10% service charge / 5% Govt tax) meaning if the price is 100++

you will end up paying 100+10+5 = 115nett

This led to a lot of confusion/dispute with foreign guests coming to Malaysia. Now (Some time back actually) Hotels are required to publish nett rates by law.

 

If you go to Tiger airways and Jetstar's website to book - you will be given a "Nett" rate from the start (unless if you add in frills such as seat selection fee, checked in baggage fees, etc)

This is tranpsarent meaning what you see displayed is what you pay.

 

In AK/MH you need to factor in

1st - "airfare" then " (very cheap! )

2nd - Admin charges" (Bloody expensive )

3rd - and the other frills

and towards then end when you see the nett charges you say " to hell with it!!!

 

Consumers feel cheated - just like MH and AK's zero fares, no surcharge promo, etc... you end up paying for admin fees or other fees that is hidden. In other countries this is akin to misleading your customers or cheating in other words. (varies from the laws of country to country)

 

 

 

Sometimes I can not understand this think..What is administrative fees about??from my understanding, it include insurance cover to passenger..If it so, why it be called as "administrative fees"..Previously I was thought that fee only applicable for those who were brought the ticket from counter, but my presumption was wrong on that matter.. As far I now this fees still new, around 2 to 3 years been introduced..Sorry if what I write here is wrong..

Edited November 17, 2008 by yeadrian

[BC Tam 2]

and towards then end when you see the nett charges you say " to hell with it!!!

Here is where you probably get the psychology factor coming into play

I suspect for most people, after going through all the searches and data entry and countless mouse clicks, would NOT say "to hell with it!!!" but proceed to volunteer their credit card details instead !

 

I can think of two reasons

(1) fear that if we are to restart the whole process again online, the 'bargain' may have been snapped up by someone else instead

(2) tedium of redoing all the typing and clicking all over again

 

Those people at AK and MH are good at this game I tell you !

[Nizam 0]

Hopefully this will not happen in the future ..

 

Edited November 17, 2008 by Nizam

[yeadrian 0]

salient point of physchological observation you got there... as for me I just hate the idea of being surprised at the end with a really high price even though its a cheap promotion..

was checking out Tiger airways - RM79 nett per way (without frills) - KUL to SIN and also SIN to KUL early Dec - that's attractive to me....

 

 

Here is where you probably get the psychology factor coming into play

I suspect for most people, after going through all the searches and data entry and countless mouse clicks, would NOT say "to hell with it!!!" but proceed to volunteer their credit card details instead !

 

I can think of two reasons

(1) fear that if we are to restart the whole process again online, the 'bargain' may have been snapped up by someone else instead

(2) tedium of redoing all the typing and clicking all over again

 

Those people at AK and MH are good at this game I tell you !

 

Oh yeah, this video cracks me up!

 

Hopefully this will not happen in the future ..

 

 

[mimiteng 0]

Hopefully this will not happen in the future ..

 

 

Wahahaha.. funny video but don't tell me this will become the reality - -''