Little more than a month ago,
I wrote about the declining state of customer service offered by the major airlines, and their increasing need to produce revenue in response to dramatic increases in oil prices. I wrote,
"Sadly, air travel is starting to resemble restaurant service more and more. Passengers used to get free meals, free beverages, free blankets and pillows, a selection of newspapers on each flight, and paid no charge for checking their baggage. Those are the old days. We are now moving to restaurant-style a-la-carte pricing."Oh, how I wish I had been wrong. Sadly I was not.
Today, the Associated Press,
ABC News, and other outlets report that American Airlines is considering implementing an a-la-carte pricing system for flights next year. The goal is to give passengers lower fares, and have them only pay for the benefits they want.
Daniel Garton, American Airlines' executive vice president of marketing, said, "We as an industry have opted to not just raise (ticket) prices but to raise prices and change the fee structure." He added that if there was not a change, "you're not going to be talking about fees — you're going to be talking about lost service ... being able to have a flight to San Diego."
Experts said American was trying to match Air Canada which adopted a-la-carte pricing earlier this year. It's worth noting that Air Canada is also the only North American airline to lower its fuel surcharges as the price of oil drops. Oil closed at $93.88 today, down from $145 a barrel in July. Sadly, the fuel surcharges implemented at that time remain on most airlines, but that is another story. Let's take a look at Air Canada and its pricing system.
I visited the Air Canada site and looked at prices for a round trip ticket from Toronto to Calgary, leaving October 27 and returning October 30.
Air Canada refers to its base service as Tango. A suitable name, whenever I think of the Tango, I always think of Canada! Well, maybe not.
Tango is their lowest class of service. Their next classes are Tango Plus (can you do a paso doble with the gate attendant before boarding?), Latitude, and Executive Class.
Prices for a non-stop flight on October 27 with Tango class service range from $133 to $344. These prices are in American dollars, and do not include "tax, fees, and some other charges." Tango is the way to go if you only want to fly and don't want to pay for anything extra. The other classes, which offer additional service and their ticket prices, are Tango Plus $176-$387, Latitude $456-667, and Executive Class $1,532-1,766.
Tango is the basic service, you will pay for everything else. The first charge, if you wish, is for Air Canada's
On My Way TM service, and will cost $25-35. This service is designed to help you if your flight is delayed or cancelled within 48 hours of departure. For this fee you will get access to special Customer Service Representatives, priority rebooking on the first available flight, free hotel accommodations and car rental, and appropriate meal vouchers.
Air Canada says
On My Way TM service is unique among North American airlines. I doubt I would pay this fee for a summertime flight when the chances of a cancellation are low, but it could be a very wise insurance investment when flying in Canada during the winter. The free hotel and car rental options are well worth the cost! Bravo to Air Canada for developing such a service!
The $25-35 fee is the same for all four classes of service.
Other charges for flying Tango include $25 for a call center and airport service fee. You will also pay this fee with Tango Plus, but it is included with Latitude and Executive Class. The Air Canada site does not explain what an airport service fee is.
An any-time fare change fee is $75 plus the fare difference. The fee is only $50 for Tango Plus, and there is no charge for the two higher classes. Same day airport changes are $150 with Tango, $50 with Tango Plus, and again, no charge with the two higher classes.
Pay for your "Onboard cafe" food service in advance, and it is only $6 (an $8 value) in the first two classes. Travelers in the two higher classes receive complimentary meal and beverage service.
If you want to select your seat in advance, you will pay $15-22 in Tango class, but get it free of charge in the three other classes. At this point, Tango Plus looks like a much better deal: pay an extra $40-$60, but save the fee for selecting your seat in advance, and have to pay less if you need to change your flight.
You cannot access the Maple Leaf lounges with a Tango ticket, but Tango Plus and Latitude can enter the lounge for $25, while Executive Class passengers can use the lounge with no extra fee.
If you are saving your Air Canada Aeroplan miles, Tango Plus is the better deal. You'll receive 100% of your miles in Tango Plus (and the two other classes) , but only 25% in Tango if you do not have elite status. Finally, if you make your reservation online, you will earn 1 mile for every $3 you spend for your Tango ticket, 1 mile for every $2 you spend in Tango Plus, and 1 mile for every dollar you spend for the two higher classes.
Some of the extra features at no extra charge in Latitude and Executive Class service include: priority check-in, baggage handling, and boarding; same-day standby; fully refundable ticket; access to special hotel and car rental offers; discount parking at the airport, and of course, much better service while in the air.
All four classes will allow you to check your first bag at no charge; the two Tango classes will charge $25 for the second bag, while there is no additional charge in the two higher classes.
With Air Canada a-la-carte pricing, you can even lower the price of your ticket. If you have no bags to check, you'll save $3. If you are in Tango class and don't want to earn Aeroplan miles, you'll save $3, and Tango class passengers can save another $5 if they agree to not change their itinerary.
And there you have it, a-la-carte pricing!
Was that easy for you to follow, or was it more complicated? Initially, it seems more complicated, but I think people will adjust as time goes on. We may even see a variety of options.
Look elsewhere in the travel industry. Some hotels offer a bed and little more while others offer a much more expensive all-inclusive service that includes meals, pool access, and other amenities. We don't find it odd to deal with that. Air Canada does the same, offering the basic Tango service, or the all-inclusive Executive Class.
Is this an example of what American Airlines will do, or will they do add extra options? Will passengers be able to reserve a pillow or blanket for $6 when making their reservation? What about paying for a beer in advance, making it that much easier for the flight attendants to serve you without having to deal with collecting payment? Only time will tell.
The future is coming and there is nothing we can do to stop it. The only question is, when will it arrive?
Labels: a-la-carte pricing, American Airlines