And just how important are these add-ons to profit margins?

Globally, ancillary revenue represents about 18% of airline revenue, and so it is crucial for airline profits.

And what's interesting about ancillary revenue is passenger fares are gonna fluctuate based upon demand and supply.

The fees associated with airline travel have been far more durable in terms of they don't swing very much, and so that has provided airlines with a very, uh, safe and attractive base of revenue when times are very challenging.

Do you think we're seeing an end to that super low-cost air travel?

There's a distinction between Europe and the US in that regard.

The majority of the service in Europe is provided by low-cost carriers, and they dominate the pricing structure.

In the US, the opposite is true.

Um, so what's up with that? It, it seems like maybe we just found another reason why American's margins are thinner.

So United has this very surprising, very aggressive baggage policy.

And I, when this came out, every time I take a flight on a, on United Airlines, um, I take the opportunity to ask gate agents, "How is this working?" And I am surprised by the response, "It's working fine." And so when you buy a basic economy fare on United, you are precluded from taking a overhead bag.

And here's where things get very interesting.

So they want, United wants to force these passengers to check in at the counter so that the counter agent can then see what bags they have with them, and then check them at the counter.

That was the original policy for basic economy.

You could not get a boarding pass unless you check in at the counter.

Mm.

What are the key trends that you're seeing?

Well, it's interesting to talk about myths because right now, AI is obviously a big topic at this conference.

And there's another side to AI, and that is technology.

people who are consumers who are not tech savvy.

And I caution the industry against removing human staffing either in call centers or at the airport because there's a good chunk of consumers who are not tech savvy.

And so when you present them with the kiosk, They have no idea what to do.

And so I advocate for a greater sense of empathy for folks who are buying tickets.

Without naming names, what does behaving badly look like in an ancillary revenue?