Amadeus has discovered in its latest research that travellers tend to
drop bookings when FX fees reach 5% of the cost of a flight. A high 89%
of travellers are likely to choose one airline over another if given
the option to pay in their preferred currency.
Using a dummy airline website, Amadeus worked with psychological
research firm Innovationbubble to study travellers’ conscious and
subconscious reactions to different levels of FX fees.
According to the research, travellers began to notice FX fees when
they reached 3% of the total ticket price, showing strong resistance as
the fee approached the psychologically important threshold of 5%.
However, the overall cost of the flight remained the most important
factor for securing a booking.
Over 86% of Indian travellers dropped bookings due to FX fees, with
Japan travellers as the next highest at 74%, and China travellers at
69%. The 5,500 survey participants were regular flyers from the US, UK,
France, Italy, Germany, Spain, India, China, Japan, Brazil, and Mexico.
Bart Tompkins, Managing Director, Payments, Amadeus said: “Travellers
want a transparent shopping experience with flight prices displayed in
their currency of choice. Today, the industry largely outsources
currency conversion to financial intermediaries and our research shows
this can lead to high fees that often exceed the threshold travellers
Importantly, the research showed that 59% of travellers would prefer
their airline to handle the currency conversion rather than a bank, with
43% stating that bank-levied fees are too high.
In addition, travellers confirmed that on average, they now trust
airlines more than banks to handle FX transactions on their behalf.
Travellers in India, Japan and China trust airlines considerably more
“Airlines now have an opportunity to become fintechs, bringing FX
services in-house so they can set reasonable fees and deliver an
improved digital shopping experience, with the choice and transparency
travellers demand,” concluded Tompkins.
Research results showed a clear indication that travellers want airlines to offer an end-to-end online booking experience.