From ‘free’ to fee: Acceptability of airline ancillary fees and the effects on customer behavior

• We present a model of fee acceptability, negative emotions and retaliatory behavior.
• The model is tested using two data sets from the airline industry.
• Implementation of ancillary fees has direct effects on perceived betrayal and anger.
• Anger moderates the relationship between betrayal and retaliatory behavior.

Businesses in various consumer service industries have begun to unbundle their service offerings by introducing numerous fees for products and services that were previously provided as “free.” Anecdotal evidence in the media indicates that these fees cause widespread public displeasure, frustration, and outrage. This paper develops a framework of fee acceptability, negative emotions, and dysfunctional customer behavior, which is tested using data from the airline industry. Findings identify the strongest effects on betrayal in the case of baggage fees, followed by charges for comfort. Also, betrayal has a direct effect on complaining, whereas anger mediates the relationship between betrayal and negative word of mouth.