This Fee Would Have Been a New Form of Deception If It Were Implemented

With the introduction of a service fee of 1.3 percent if you used a credit card to purchase one of its new Economy Lite fares, Singapore Airlines was getting ready to engage in what could be considered a new form of deception — until a decision was reached to rescind its plans to charge that fee.

This Fee Would Have Been a New Form of Deception If It Were Implemented

The reason why a credit card service fee would have been a new form of deception is because it is essentially similar to that of carrier-imposed surcharges and mandatory resort fees: it is designed to not be included in the original advertised price of the ticket and therefore have the price appear artificially lower when first viewed by a potential customer than the actual amount paid.

Singapore Airlines will begin selling tickets for its new Economy Lite product — essentially similar to what is known as Basic Economy in the United States — as of Saturday, January 20, 2018 primarily to compete with ultra-low-cost carriers on price while still providing what is considered a superior service.

The chart below illustrates the comparison between Economy Lite fares and the other two economy class fares offered by Singapore Airlines.

ECONOMY BOOKING CLASSES LITE  STANDARD  FLEXI 
30 kilograms 30 kilograms 35 kilograms
Chargeable Complimentary — Standard Seats Complimentary — Forward Zone and Standard Seats
50 percent 75 percent 100 percent
Not allowed Allowed Allowed
Not allowed Chargeable Chargeable
Chargeable Chargeable Complimentary
Chargeable Chargeable Chargeable

The credit card service fee of 1.3 percent per ticket would have been capped at $50.00 — but that is still up to $50.00 about which the purchaser of the ticket would not know by initially seeing the advertised price of that ticket.

Fortunately, the decision to rescind imposing that fee was announced — almost literally at the last minute — from Singapore Airlines:

We refer to the 3 January 2018 update on our website regarding the implementation of a Credit Card Service Fee (CCSF) in Singapore, effective for ticketing from 20 January 2018 for selected booking classes.

Following a further review, Singapore Airlines will not be proceeding with the implementation of the CCSF.

Summary

For an airline known for its world-class service to even consider implementing such a deceptive maneuver is shameful. Granted, 1.3 percent may seem like little more than a drop in the bucket — one would have to spend $3,846.20 on airfare to reach the cap of $50.00 on the credit card service fee — but that is not the point.

If a consumer is price sensitive, then that consumer will want to compare prices to ensure that he or she is getting the best value. Credit card service fees — as well as carrier-imposed surcharges and mandatory resort fees — are intentionally designed to “muddy up those waters” and render direct price comparisons to be significantly more difficult for those consumers.

Legacy airlines largely avoided such deceptive practices until the cash cow of ancillary fees were unbundled from airfares and sold separately in recent years. Unlike with ultra-low-cost airlines — which seem to charge for everything except the air you breathe — a consumer can count on legacy carriers to basically find out the cost of airfare without being surprised by fees in the process.

The worst part is that avoiding a credit card service fee can potentially be virtually impossible — or, at least, extremely difficult — to avoid, as credit cards are what are generally used by consumers to purchase airline tickets via the Internet. Although it was not exactly the easiest thing to do, avoiding the credit card surcharge implemented by Ryanair for my first flight and my second flight was not all that difficult to do if remaining alert while booking a ticket.

I have no issue with airlines charging fees on certain products and services offered which are optional. Not everyone needs an alcoholic beverage while traveling. Not everyone must have a premium seat aboard an airplane. Fees on those two options can easily be avoided — or, instead, paid by passengers who want to use them.

For easier price comparisons, I also believe that all mandatory taxes and fees — as well as the cost of “options” which are virtually impossible to avoid — should be bundled into the total advertised price, with the option for the consumer to see the breakdown of that cost itemized in a format which is easy to view and read.

That the consideration of Singapore Airlines to charge a credit card service fee on its Economy Lite fares was reversed is a welcome sigh of relief — but is the credit card service fee a sign of what other airlines might consider implementing in the future?

Photographs and composite image ©2016 by Brian Cohen.

5 thoughts on “This Fee Would Have Been a New Form of Deception If It Were Implemented”

  1. colleen says:

    Brian, I won’t argue on uncertain facts. But please take a look – IIRC, Australia charges a CC fee at hotels for checkout.

    1. Brian Cohen says:

      You are correct, colleen — and I covered that in this article:

      http://thegate.boardingarea.com/update-on-surcharge-when-paying-with-a-credit-card-in-australia/

      The state of Georgia in the United States also charges $5.00 per night — even though it is not a credit card fee:

      http://thegate.boardingarea.com/new-tax-five-dollars-per-night-for-hotel-stays-in-the-state-of-georgia/

      The difference is that those are governments which implemented those fees — not that that is necessarily the correct thing to do — while in this case, a business entity would have been the source of that fee and not a government.

  2. rmh says:

    love your site. and i love to pick nits! ha

    change “was” to “were”. subjunctive tense.

    “of Deception If It ~~Was~~ Implemented”

    1. Brian Cohen says:

      Some people might be annoyed by your corrections and picking nits, rmh — but I welcome them wholeheartedly; and you are correct.

      This is one of those trees hiding in plain sight in the forest type of errors; and I should have caught that. I have since changed it.

      Thank you. I truly appreciate it.

      1. rmh says:

        thanks brian. i love your site…and i love grammar.

        let me know when you’d like to hire me. i charge exactly and precisely $0. non-negotiable.

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