canadiancow

Right, incidental revenue increased significantly more than overall revenue. Which means that people were paying for what they were using, rather than getting bundled fares.

Discussing lounges, at all, seems like a bit of a straw man.

Tango fares are unbundled. No bags. Even domestic Flex fares include a bag. Latitude two. Business three.

Tango fares also don't include lounge access.
Nor do Flex fares, though it can then be purchased for some amount.

Business class fares are bundled fares. In addition to bags, they include lounge access, priority services, and tons of other bundled features.

If you want a cheap fare, it's going to be unbundled, and everything on top will cost money. That's Tango.

If you want everything included, that's Business.

If you want something in between, Flex includes seat selection, a bag, and some other minor things.

But making the argument that features of my business fare should be unbundled and cost extra because I don't hate the idea of Tango fares is a little ludicrous.

eigenvector

I don't think that's an accurate way to characterize fares for a modern international airline with complex revenue management. The cost of a fare is not related to the cost of service provided in any meaningful way except in the very long-term sense that the airline must avoid going bankrupt. The only thing that determines the fare is how much the airline thinks the market is willing to bear, not what is included. Which is exactly what Air Canada would say if you asked them to explain why they will fly you from Vancouver to China, with 2 included bags and meals, twice over for less than they'll take you to St John's for. AC has pricing power on YVR-YYT, they don't on YVR-China.

Cost reductions only get passed on to the consumer in highly competitive environments, which Canadian domestic air travel is not. In any situation, the airline is already trying to maximize revenue (i.e. charge the maximum that the public is willing to pay) regardless of whether baggage, food, etc. is included. Delivering less just improves the airline's bottom line, which may be critical to the long-term financial viability of that route or their entire operation.

Cutting free baggage on very high load factor routes likely did not decrease fares one cent. On routes that were performing poorly, it probably let AC drop the lowest Tango fare by $10 or $15 to try to fill more seats without losing money. But it's not as simple "add any free perks and fares will go up". Airlines will raise fares at any time they can, not only in lockstep with increasing perks/services.

segacs

Privyet, comrade.

Stranger

Alas, I suspect that most people, given a choice of such a minimum standards, but assorted with the (even minimal) price implications would vote against.

Sad truth is that the system is working. airlines are delivering what most customers want. Actually AC was among the last ones to recognize it.

flybit

Actually this just happens when there is no competition.

segacs

Once again, I think your price implications argument has been thoroughly debunked on this thread.

canadiancow

Funny, aren't you one of the ones who said there's tons of competition on my primary route of SFO-YYZ?

And yet, AC's baggage policies are "worse" on transborder routes (Flex gets 0) than on domestic (Flex gets 1).

If this is all related to competition, then transborder itineraries would have a higher baggage allowance than domestic, no? Because AC has to compete with UA, DL, AA, WS, and I actually don't even know which other airlines fly into Canada.

But domestically, it's only WS.

So why is the baggage allowance lower on transborder itineraries where there's way more competition?

Stranger

In this thread? Really, where?

Best I saw was Cow, "I don't want to pay for your luggage." Which arguably sums it up.

segacs

See eigenvector's post above.

CZAMFlyer

Which I could understand, if you were a price-sensitive flyer. But you willingly and repeatedly purchase flight passes and single fares that cumulatively cost thousands more than is absolutely necessary to get from A to B (or C via D and E). Of course, it's completely fine if you desire the flexibility, comfort, status and upgrades those higher fares enable. But let's not pretend you give two farts about incremental bag surcharges.

Stranger

???

I think I have agreed that price implications might be "minimal."

Bottom line, the race to the bottom is alive and well.

AC has never done better than after they introduced sardine class. People seem to love it. Which BTW has to have a much bigger impact on fares than unbundling luggage fees.

The one very negative impact of luggage fees actually is that as a result so many people are trying to get away with bringing the kitchen sink onboard. One might have thought that that would have made airlines regret the move. But apparently not.

canadiancow

Well, let me rephrase.

Replace "I" with "Most flyers".

My mom doesn't want to pay for your luggage.
My dad doesn't want to pay for your luggage.

The primary reason I buy these flight passes is that at time of booking, they are CHEAPER than the lowest available fare. I am a cost-conscious consumer. My travel patterns just result in my "lowest possible fare" being 3-4x that of yyznomad on his one annual trip, booked 10 months out, to see his grandmother.

robsaw

Given that the suit claims that "announcing" is logically analoguous to "collusion", I will go for the basement level understanding.

The general populace apparently cannot comprehend the difference between price-fixing and price-matching and how and why one is legal and the other isn't. Of course price-matching is trumpeted by the "smart-consumer" as taking advantage of retail competitiveness in other markets, consumer electronics in particular but is evil when gas retailers and airlines do it (albeit, in a somewhat different form).

There is clearly a lack of competition in at least a good portion of the Canadian passenger airline market but that is a problem quite different from collusion.

Transpacificflyer

This has to be certified. It will take 1-2 years before this even hits the courtroom.
Silliness personified. Business must be slow for Tony.

Antonio8069

Yeah, & what is the proposed remedy? My guess is it won't be complimentary bag checks?