Airline Business - AA interested in "unbundled" pricing
#16
Join Date: Aug 2004
Location: HRO/SGF (Home)/DFW (Work)
Programs: AA EXP/2MM, Marriott Silver
Posts: 1,623
The message by Cush was this is the next agenda item AA has for the GDSs, so that their systems can be configured to charge on an a la carte basis.
I actually just went to the AC site and checked it out - if you put in a city pair - i did yyz-yvr at the top you can click on a "compare fare options" icon which lists out all of the differences. After you select flights, it gives you a menu of add on and deductions - i.e. - you can save a couple dollars if you dont want mileage or you are not checking bags - once you finish this page and it gives you a fare, you then get another sell up page with options again to get mileage, lounge access, etc.
It is easy to see how an airline would like this type of capability - pre-purchase food, pre-purchase lounge access -- I think the big "shoe dropping" will be the day major carriers actually un-bundle mileage.
I actually just went to the AC site and checked it out - if you put in a city pair - i did yyz-yvr at the top you can click on a "compare fare options" icon which lists out all of the differences. After you select flights, it gives you a menu of add on and deductions - i.e. - you can save a couple dollars if you dont want mileage or you are not checking bags - once you finish this page and it gives you a fare, you then get another sell up page with options again to get mileage, lounge access, etc.
It is easy to see how an airline would like this type of capability - pre-purchase food, pre-purchase lounge access -- I think the big "shoe dropping" will be the day major carriers actually un-bundle mileage.
#17
Join Date: Aug 2006
Location: Champaign (CMI)
Programs: AA ExecPlat
Posts: 92
The "pay-for-miles" option would definitely mean that I would not be able accrue miles for my work flying (technically I am state employee)...mwhitted's point is well put.
#18
Suspended
Original Poster
Join Date: Dec 2005
Posts: 9,916
AA may see this as double dipping anyway - particularly with big corporate accounts that are getting discounts, upgrades, etc. as part of their deals. And in fact, they could use it as negotiating chip as part of corporate contracts. I believe that's what the car rental companies - at least Hertz did/or had done at one point. Of course, the fliers who would likely loose out are those who work for smaller companies that don't have corporate deals with AA, leisure customers/those on deep discounts who would have to calculate if paying for miles is worth it and probably customers in places like DFW were AA has a captive audience and is probably less generous in negotiating.
#19
Join Date: Aug 2004
Location: HRO/SGF (Home)/DFW (Work)
Programs: AA EXP/2MM, Marriott Silver
Posts: 1,623
AA may see this as double dipping anyway - particularly with big corporate accounts that are getting discounts, upgrades, etc. as part of their deals. And in fact, they could use it as negotiating chip as part of corporate contracts. I believe that's what the car rental companies - at least Hertz did/or had done at one point. Of course, the fliers who would likely loose out are those who work for smaller companies that don't have corporate deals with AA, leisure customers/those on deep discounts who would have to calculate if paying for miles is worth it and probably customers in places like DFW were AA has a captive audience and is probably less generous in negotiating.
#21
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Original Poster
Join Date: Dec 2005
Posts: 9,916
Just did a search NYC/MCO out 14 Mar ret 21 Mar and AA was $198; B6 $263. A couple times when I have had to buy tickets for family, I found AA lower than B6, so I'm not sure what % of the time B6 or AA have lower fares.
#22
Join Date: Aug 2004
Location: HRO/SGF (Home)/DFW (Work)
Programs: AA EXP/2MM, Marriott Silver
Posts: 1,623
I know in the book Blue Streak: Inside jetBlue, the Upstart that Rocked an Industry David Neeleman tells a story of a JFK-Florida route where JetBlue's average yield was actually HIGHER than DL's (DL was probably practicing a little preditory pricing) and of course B6's costs were LOWER than DL. LOWER yield AND HIGHER costs. Sucks to be DL! I'm not sure what the % is either, but I'm sure that on the average, B6 wins.
#23
Join Date: Dec 2006
Location: ORD
Programs: AA EXP,2MM, DL Gold,Starwood PLT
Posts: 3,876
Ah, no. They change them all the time, e.g. the recent oneworld tie-ups. These systems work and work well, with incredible uptime and live, on-the-fly deployment of new business function (like changing a tire on a race car running full speed, no pit stop), and the GDS vendors by and large run tight ships with ridiculously low per-transaction costs.
Actually, the real reason is that U.S. airlines are broke. They aren't investing in capital of all kinds, from new airplanes to core IT application changes such as this one. And remember that a couple big U.S. airlines spun off the GDSes a slump or three ago to raise cash, which presumably they burned right through a slump or two ago.
Actually, the real reason is that U.S. airlines are broke. They aren't investing in capital of all kinds, from new airplanes to core IT application changes such as this one. And remember that a couple big U.S. airlines spun off the GDSes a slump or three ago to raise cash, which presumably they burned right through a slump or two ago.
You’re correct on low per transaction costs, uptime etc, but WAY off on "on the fly deployment on new business function". Changes required to implement the sale of the types of services mentioned are very time consuming and expensive. Think in the range of tens of thousands of hours in effort required.
On a related note, Cush is actually leaving out an important point. AA could implement many of the additional services, IF the company was willing to invest in the IT changes in its own systems. Even if at the GDS level changes were not made, AA could self fund changes in its environment to allow a large portion of travelers to have options. They so far have chosen not to do this. AC pulled it off, so AA certainly could if they wanted it bad enough.
Last edited by grahampros; Mar 2, 2007 at 4:07 pm
#24
Join Date: Mar 2004
Location: Singapore
Programs: AA Gold, IHG & Marriott Platinum, Hilton Gold
Posts: 1,024
You’re correct on low per transaction costs, uptime etc, but WAY off on "on the fly deployment on new business function". Changes required to implement the sale of the types of services mentioned are very time consuming and expensive. Think in the range of tens of thousands of hours in effort required.
On a related note, Cush is actually leaving out an important point. AA could implement many of the additional services, IF the company was willing to invest in the IT changes in its own systems. Even if at the GDS level changes were not made, AA could self fund changes in its environment to allow a large portion of travelers to have options. They so far have chosen not to do this. AC pulled it off, so AA certainly could if they wanted it bad enough.
#25
Join Date: Sep 2000
Location: Denver, Colorado
Programs: DEN: WN or UA, AA LT Gold, VIA Preference Preferred
Posts: 1,550
Memo to legacy carriers, including AA: Are you really sure this is what you want?
#26
Join Date: Jan 2005
Location: OAK
Programs: AS MVPG 100k
Posts: 3,756
*plus extras:
[Present your Citicorp AAdvantage MasterCard for any of the below. If non-AAdvantage card, add 10% surcharge, added onto final bill on monthly statement.]
Ticket Agent check-in...$49
Kiosk check-in...$0
Pre-boarding...$99
Regular Group Boarding...$49
Boarding last...$0
Rolling baggage on carpet...$8
Using luggage bins...$29
Using under the seat storage...$39
Pre-purchased rest room ticket...$1
On-board purchase of rest room ticket...$49
Unticketed use of rest room...$99
Baby on board...$50
Two babies on board...$150
Cup of water...$10
Bottle of water...$20
Exit row seat...$89
Window seat...$49
Aisle seat...$79
Exit row plus aisle special discount...$159
Center seat...$0
Last row on MD-80...$0
Business Class seat...$249
Snack pack...$10
Meal...$50
Question to Gate Agent...$14
Question to Gate Agent (2nd time)...$24
Question to Gate Agent (3rd + times)...$34
Checked baggage (each kg)...$4 plus ticket agent check-in
Checked baggage (each kg above 20)...$6 plus ticket agent check-in
Gate connection information...$10
Ticket service charge for any extra fee...$49
Discount for AAdvantage Gold...10% (no other perks)
Discount for AAdvantage Plat...15% (no other perks)
Discount for AAdvantage EXP...20% (no other perks)
[Present your Citicorp AAdvantage MasterCard for any of the below. If non-AAdvantage card, add 10% surcharge, added onto final bill on monthly statement.]
Ticket Agent check-in...$49
Kiosk check-in...$0
Pre-boarding...$99
Regular Group Boarding...$49
Boarding last...$0
Rolling baggage on carpet...$8
Using luggage bins...$29
Using under the seat storage...$39
Pre-purchased rest room ticket...$1
On-board purchase of rest room ticket...$49
Unticketed use of rest room...$99
Baby on board...$50
Two babies on board...$150
Cup of water...$10
Bottle of water...$20
Exit row seat...$89
Window seat...$49
Aisle seat...$79
Exit row plus aisle special discount...$159
Center seat...$0
Last row on MD-80...$0
Business Class seat...$249
Snack pack...$10
Meal...$50
Question to Gate Agent...$14
Question to Gate Agent (2nd time)...$24
Question to Gate Agent (3rd + times)...$34
Checked baggage (each kg)...$4 plus ticket agent check-in
Checked baggage (each kg above 20)...$6 plus ticket agent check-in
Gate connection information...$10
Ticket service charge for any extra fee...$49
Discount for AAdvantage Gold...10% (no other perks)
Discount for AAdvantage Plat...15% (no other perks)
Discount for AAdvantage EXP...20% (no other perks)
#28
Join Date: Mar 2001
Posts: 487
How has NW done with preferred seats for sale?
Did not DL lose business with reduced miles for select fares?
How do you compare vs B6. WN, and Airtran etc? Overall fares and bennies are better now than full service airlines.
The FF program keeps people still loyal.
Did not DL lose business with reduced miles for select fares?
How do you compare vs B6. WN, and Airtran etc? Overall fares and bennies are better now than full service airlines.
The FF program keeps people still loyal.
#29
Join Date: Jun 2006
Location: West Palm Beach, FL
Programs: AA EXP, CM Silver, IHG Silver
Posts: 522
Without mileage programs, no one will care what airline they are flying, it will all be about price, and, oh, the airline with cleaner planes, friendlier employees, better snacks and beverages, and larger seat pitch will attract more travelers.
Memo to legacy carriers, including AA: Are you really sure this is what you want?
Memo to legacy carriers, including AA: Are you really sure this is what you want?
Would we be ok with this if elite's were given exceptions?
For example, quoting Martin33's example for AC's Tango Fare...
earning 50% miles instead of 0% miles: $3
earning 100% miles instead of 50%: NA, must "buy up" a fare class
advance seat selection: $12
2pc checked baggage instead of zero: $4
right to change for $35-$130 fee (instead of no-change/cancel/reuse): $6
prepaid meal voucher: $4
... I would appreciate logging in and being recognized as an Elite and seeing...
earning 50% miles instead of 0% miles: free
earning 100% miles instead of 50%: NA, must "buy up" a fare class
advance seat selection: free
2pc checked baggage instead of zero: free
right to change for $35-$130 fee (instead of no-change/cancel/reuse): free
prepaid meal voucher: free or -$4.00 for no meal
#30
Join Date: Dec 2006
Location: ORD
Programs: AA EXP,2MM, DL Gold,Starwood PLT
Posts: 3,876
[QUOTE=PMMMColonel;7329451]How has NW done with preferred seats for sale?
Prefered seat booking is as I understand it only avaible 24 hours prior to depature. If you book through a GDS via a travel agency, you have to call NW directly to upgrade the seat, or go on online. Apparenly, NW made investments in their internal systems that would allow this. Also, the downside is that they severly limit seat selction capabilites. Different issue than the GDS that Cush was going on about.
Terms on the website are clear how this is done.
How to buy: Simply go to nwa.com check-in or Manage My Reservations within 24 hours of departure. Proceed to 'My Seat Selection' to select and purchase a Coach Choice seat. Or, go directly to the airport and purchase a Coach Choice seat at a Self-service Check-in Kiosk.
How do you compare vs B6. WN, and Airtran etc? Overall fares and bennies
Prefered seat booking is as I understand it only avaible 24 hours prior to depature. If you book through a GDS via a travel agency, you have to call NW directly to upgrade the seat, or go on online. Apparenly, NW made investments in their internal systems that would allow this. Also, the downside is that they severly limit seat selction capabilites. Different issue than the GDS that Cush was going on about.
Terms on the website are clear how this is done.
How to buy: Simply go to nwa.com check-in or Manage My Reservations within 24 hours of departure. Proceed to 'My Seat Selection' to select and purchase a Coach Choice seat. Or, go directly to the airport and purchase a Coach Choice seat at a Self-service Check-in Kiosk.
How do you compare vs B6. WN, and Airtran etc? Overall fares and bennies