Wizz Air expects other operators to follow suit and implement a similar luggage policy, said Daniel Carvalho, Wizz Air’s official in charge of communication, at the time the announcement was made.
The largest airline operator in Romania by passenger numbers chose to charge EUR10 for the carry on baggage, which used to be free. The allowed size for the baggage has been lowered, therefore the small trolley bag must be replaced by a small backpack or laptop carry case to avoid paying the new fee.
Since very few Romanians use a backpack when traveling by plane, most Wizz Air passengers will have to pay the extra fee. The new fee was introduced alongside an EUR5 cut of the air fare for all the airline’s flights as a marketing strategy, with the company sharing the savings on fuel by reducing the baggage weight.
Wizz Air expects passengers to bring 20% less carry on luggage, which would translate, as De Carvalho says, into greater comfort, faster boarding and 500 tons of fuel savings a year for each flight, that is EUR450,000.
The officials expect one quarter of the passengers to choose to pay the new luggage fee, thus generating additional revenue of almost EUR8 million.
About one third of the passengers used to have a large carry on baggage on the London-Katowice route, less representative for the Romanian market, given the different travel habits of the Poles.
Daniel de Carvalho says that his airline had expected people to make the switch to checked baggage for the EUR5 difference, but the tests showed it has not happened yet. The first results are expected to occur only in six months’ time, when profitability improvement figures become available, as the benefits are clear, according to the official, who says carry-on weight will decline, punctuality will increase, the company will collect more money and the air fare will go down.
Less than a week after Hungarian-owned Wizz Air made the announcement, Romanian-held Blue Air, the third largest airline on this market by passenger numbers after Wizz Air and regular airline TAROM, upped the free carry on baggage weight limit from seven to ten kilos to “meet the needs of those traveling in Europe”.
Mirela Tudorache-Secan, Blue Air’s marketing manager says the operator decided to keep the international baggage size standards and not charge any fee, therefore it expects to gain market share especially among passengers flying for city breaks.
The purpose of introducing a carry on luggage fee is testing the business model low cost airlines use. The top performers among low cost airlines usually generate as much as 20% to 30% of their revenue from charging for various services, while traditional airlines, whose business model is different, generate 3%.
This means, says Szabolcs Nemes, consultant with Roland Berger advisory firm, that low cost operators are trying to find new ways to generate revenue and the new fee introduced by Wizz Air is not connected to any recent event, financial or otherwise, or an attempt to reduce fuel consumption.
This kind of fee is not used by many companies (two other examples would be Spirit Airlines and Allegiant Airlines, both in the US), and the decision the airline made is bold and will at first cause a wait and see reaction among rivals.
The Roland Berger consultant says that while Wizz Airs’ decision may induce a more reasonable behavior in some passengers, it will be hard to change the habit of using a traditional carry on luggage to replace it with a smaller one.
(English version by Loredana Fratila-Cristescu)