Fast Company

Technology: Come One, Come All?

The a la carte model seems to be the topic du jour these days in the world of air travel. The airlines' move to an unbundled, or a la carte, strategy is forecast by many to be one of the biggest evolutions in airline retailing since carriers started selling tickets.

But in years past when one airline moved in a direction, whether cutting commissions, setting air fares, and so on, the rest of the airlines would inevitably follow suit. But that may not be the case when it comes to a la carte. 

What we will see are airline retailing strategies in many shapes and forms. Some carriers may decide to go 100 percent a la carte, some carriers may see a competitive advantage in not going a la carte at all, while other carriers may pursue a hybrid retailing model. 

On one end of the spectrum you have Southwest Airlines. At least for now, Southwest is banking on maintaining and touting the "traditional" retailing approach, which includes amenities in their base ticket price.   

But Amadeus's business partner Air Canada has gone to a more hybrid approach, offering a four-tier set of "fare families" that puts the consumer at the center of that airline's value proposition. Those four levels of options are specifically designed for specific demographics of Air Canada's customer base. There's the bare-bones package option, and then greater-value packages as the customers "buy up."

In addition to the packaged options, Air Canada travelers can also buy up or buy down specific amenities based on what they want or will use. The four-tier approach has been quite successful for Air Canada. That's because Air Canada shows you the value. That "transparency" lets you see what you are paying for.

There are a multitude of approaches that can and will be successful for the airlines, but one thing is clear — "choice" (aka a la carte) is the wave of the future.

 

 

Airline Futurist • Miami • www.us.amadeus.com

 

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