Airline Business - AA interested in "unbundled" pricing

 
Old Mar 2, 07, 3:26 am
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Airline Business - AA interested in "unbundled" pricing

In the March issue of Airline Business, from David Cush, svp-sales at AA:

'So where will airlines turn if their own websites will never fully replace the GDS? American's Cush believes the next big hurdle is an "a la carte" style of unbundled selling, as pioneered by Air Canada. The idea is for airlines to individually sell selected services like preferred seating.

This "creates a technological hurdle for the GDSs," says Cush, because they need pressure from a mega carrier to offer an unbundled solution. However, "Air Canada is not big enough in the States," he says, to force such a change.

American, which can force the GDSs to adopt this model in the US, is looking closely at unbundling some services. "When a critical mass is achieved over here and if the GDSs don't push it to the front burner they will be at a competitive disadvantage," says Cush. "It is getting us to where we probably would have been already had we not been regulated for all those years."

At Air Canada, the executive who designed the technology to get unbundled pricing out to the customers, Marc Rosenberg, agrees. Rosenberg, vice-president for sales and product distribution for the airline, says: "Joke all you want about charging for an aisle seat or to go to the bathroom, but if you have to compete on price you have to do these things. GDSs just were not able to sell all of our options. They had no problem booking and selling our cheapest fare, but their legacy systems just aren't nimble enough to be changed."'

http://www.flightglobal.com/articles...asy-truce.html
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Old Mar 2, 07, 3:36 am
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Originally Posted by elitetraveler View Post
"Joke all you want about charging for an aisle seat or to go to the bathroom, but if you have to compete on price you have to do these things.
Huh.
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Old Mar 2, 07, 3:40 am
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Originally Posted by IceTrojan View Post
Huh.
Maybe once they let the Y folks enjoy use of the F lavs for awhile, they think can start charging for it? Of course, that part was from AC, not AA
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Old Mar 2, 07, 6:08 am
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Sounds like a great idea. Depending on the savings, I'd be happy to pay for the business class seat and nothing else. I usually sleep through the meal on US-UK flights, anyway.

And if it saves money, I'll be happy to use the Y lavs.

How much do they have to pay US for us to listen through the 3 millionth time of being told how to fasten a seatbelt?
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Old Mar 2, 07, 6:49 am
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Originally Posted by IceTrojan View Post
Huh.
Agreed.

Color me a disbeliever.
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Old Mar 2, 07, 7:30 am
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JFK-LAX--all seats 99 cents *

*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)
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Old Mar 2, 07, 7:42 am
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Originally Posted by elitetraveler View Post
'"....GDSs just were not able to sell all of our options. They had no problem booking and selling our cheapest fare, but their legacy systems just aren't nimble enough to be changed."'
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.
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Old Mar 2, 07, 8:53 am
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Originally Posted by rploehn View Post
*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)

You forgot the charge for mileage...
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Old Mar 2, 07, 8:55 am
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Originally Posted by jabrams72 View Post
You forgot the charge for mileage...
Don't the car rental companies do something like that with corporate rates?
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Old Mar 2, 07, 9:17 am
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Originally Posted by jabrams72 View Post
You forgot the charge for mileage...
How about a charge for fuel used? Maybe they weigh you and add $0.01 per mile per kg of your weight.
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Old Mar 2, 07, 9:20 am
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Originally Posted by elitetraveler View Post
..."Joke all you want about charging for an aisle seat or to go to the bathroom, but if you have to compete on price you have to do these things....
Hmm... Now which of these things does B6 do in order to compete on price? Or Midwest?
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Old Mar 2, 07, 11:28 am
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Originally Posted by rploehn View Post
*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)
Sounds like they want to adopt banking like procedures/charges.
Maybe they will round up all the fares.
If a fare is $401.10 they will round up to $402
Don't forget about web login charges.
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Old Mar 2, 07, 11:39 am
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So erm.........how much to take a number 2 again? That is in the y toilet, at the back of a 777 though - is there a premium for the 777 also....
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Old Mar 2, 07, 1:51 pm
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Originally Posted by IceTrojan View Post
Huh.
For those who are unfamiliar with the practice, Air Canada has indeed taken it the farthest. Any subset of items can be chosen. Their list of "menu" items (one-way) on "Tango" fares, which are their lowest fare class:

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

That's a potential $58 swing per round trip, and still not earning full miles...
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Old Mar 2, 07, 2:55 pm
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Originally Posted by martin33 View Post
For those who are unfamiliar with the practice, Air Canada has indeed taken it the farthest. Any subset of items can be chosen. Their list of "menu" items (one-way) on "Tango" fares, which are their lowest fare class:

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

That's a potential $58 swing per round trip, and still not earning full miles...
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.
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