Airline Business - AA interested in "unbundled" pricing
#1
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Original Poster
Join Date: Dec 2005
Posts: 9,916
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
'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
#4
Join Date: Apr 2006
Posts: 1,360
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?
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?
#5
Moderator: Coupon Connection & S.P.A.M
Join Date: May 2000
Location: Louisville, KY
Programs: Destination Unknown, TSA Disparager Diamond (LTDD)
Posts: 57,952
#6
Join Date: Dec 2004
Location: MIA/FLL
Programs: AA-EXP 2MM; Priority Club-Platinum
Posts: 270
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)
[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)
#7
Join Date: Mar 2004
Location: Singapore
Programs: AA Gold, IHG & Marriott Platinum, Hilton Gold
Posts: 1,024
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.
#8
Join Date: Apr 2005
Location: HKG/LHR/JFK
Programs: AA EXP, BAEC Bronze, DL Plat UA, HHonors Platinum, SPG Gold, Hyatt
Posts: 3,253
*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)
You forgot the charge for mileage...
#11
Join Date: Aug 2004
Location: HRO/SGF (Home)/DFW (Work)
Programs: AA EXP/2MM, Marriott Silver
Posts: 1,623
#12
Join Date: Apr 2004
Posts: 5,630
*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)
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.
#13
Join Date: Jan 2007
Location: DFW
Programs: AA Gold, BAEC
Posts: 295
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....
#14
Join Date: Apr 2001
Location: PIT/DFW/MEL; AA Exec. Platinum & 4MM, QF WP
Posts: 7,689
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...
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...
#15
Suspended
Original Poster
Join Date: Dec 2005
Posts: 9,916
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...
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...
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.