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Saturday, November 04, 2006

Fare smorgasbord or nickel and diming?

The Cranky Flier writes how Air Canada has increased transparency in their domestic and trans-border fares. They've done this in a couple of ways.

Firstly, and I don't think this is particularly new, by creating 5 fare categories (Tango, Tango Plus, Latitude, Latitude Plus and Executive aka business Class) and making explicit what is or isn't included in each. Air Canada isn't the only airline to do this.

For example Qantas offers Red e-deal, Super Saver, Fully Flexible and Business. However, Qantas isn't quite as user friendly as Air Canada in that within each fare category there still are several booking classes, and in the case of Red e-deals some are mileage earning on partner frequent flyer programs (eg American Airlines AAdvantage) and some are not. In a case of user unfriendly design, the actual booking class is only shown after payment has been made. (Tip - you can make a guess as to booking class on routes where multiple flights have different availability within Red e-deal fare category, look for a slightly higher amount for mileage earning on AAdvantage, but this tip only works when both flights are both jets or both props since taxes differ by aircraft type.)

A better example might be Air New Zealand. They have fare categories Smart Saver (non mileage earning), Flexi Saver, Flexi, Premium Economy Saver and Premium Economy, Business Saver and Business. You can find out exactly what is included in each fare category before booking by looking up fare info.

But, Air Canada has now taken the transparency approach to another level by offering a smorgasbord of options. Don't care about the miles, save a few dollars. Want checked baggage, pay a little more. Pay to pre-select a seat. And so on. While this may appeal to some travellers, such a nickel and dime approach seems to me to be a race to the bottom and part of a trend of full service airlines trying to mimic low cost carriers (LCCs) to remain competitive.

Will it catch on? I hope not.

1 comment:

The CF said...

You are correct that the 5 categories are nothing new, but they are also nothing new for Air Canada. In my post on this, I was simply giving the background on Air Canada's evolution. In fact, they first released this simplified fare structure back on October 17, 2004. (Click here.) I must admit I'm not sure when Qantas or Air New Zealand launched their fare products, but I imagine that Air Canada was one of the first to do so.

It's funny how different people perceive the a la carte options in different ways. I personally like it because you're doing it at the time of ticket purchase. It's not like you buy the ticket and then get hit with a bunch of little fees after the fact. This just helps you craft the fare that you want up front. Now, once I click to purchase that ticket, my opinion becomes more like yours. I don't want to be hit with a bunch of fees or charges once I'm traveling, but if it's done at the original point of purchase and I only have to use my credit card once, then I like it.