American’s Gold Star for Taking a Step Toward “Productizing”

American announced yesterday that they’ll being offering a hybrid price/schedule search on the website that looks quite similar to what we’ve already seen at Southwest, Air Canada, Alaska, and Hawaiian. Though it’s not live yet (and there is no announced date), they’ve put up a demo on the website that shows what it will look like.

07_05_22 aanewweb

This is the first true legacy carrier in the US to start displaying fares in categories. Southwest has done this for as long as I can remember, but they’ve never differentiated the actual product received by people who buy in different categories.

Air Canada was really the first to begin “productizing” their fares. In other words, you receive a different onboard product, different number of miles, and different levels of fees, etc. depending upon what type of fare you buy. American hasn’t announced they’ll be moving to this type of model, but I have to think that it’s likely the main driver for an enhancement like this.

goldstarThat’s a good thing for everyone involved, and it’s why I’ve given them a gold star for the effort. It’s sort of a gold star-in-waiting so we can see what they actually do with this technology, but I have high hopes.

Why is this a good thing? As airline continue to feel downward pricing pressure (look at how much a flight cost 20 years ago, you’ll be surprised how much it was), they’ve had to adapt to charging for every little additional thing. Most people don’t like this, but then again, most people aren’t willing to pay more in their base fare either.

The problem is that the airlines don’t have the ability to really upsell you, so even if you would pay more, you aren’t given the option. For example, let’s say American’s lowest fare class has no frequent flier miles, no meal, and a $100 change fee. The next fare class up may cost $50 more but it includes miles, a meal, and a $50 change fee. Is it worth it? To some, it might be. In the current set up, there’s no way for American to try to push that option to the customer. This new functionality allows them to do that.

This gives the airline an opportunity to earn more money at the time of sale instead of nickel-and-diming throughout the travel experience, and it gives the customer more options when they’re purchasing flights. Again, this hasn’t actually happened for American yet, but the new booking interface is the first and most crucial step in making it a reality.


4 Responses to American’s Gold Star for Taking a Step Toward “Productizing”

  1. Andy says:

    When will the day come that travel sites will show this info?

  2. CF says:

    Great question. The problem for travel sites is actually synthesizing all the data. So Southwest has one group of fares, Alaska another, same with Air Canada, Hawaiian, and now American. There’s no real way to compare apples to apples here because they all use different groupings.

    If the distinction was completely fare-based, the travel sites could create their own groupings to make it work, but when there are differentiated products (like with Air Canada), you can’t exactly pick it apart.

    Let’s also not forget that many of these sites run on old school systems that aren’t equipped to return more than one fare for each itinerary.

    So I’d like to say that it’s coming soon, but the issues are large.

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