Are Airlines Moving Beyond A La Carte Pricing?
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A la carte pricing has become, more or less, accepted by fliers. Paying extra to check a bag, have an in-flight snack or connect to the Internet has become a normal part of travel budgets for most people.
A new trend could bring about a major change to this kind of practice. Unfortunately, the trend does not involve cutting extra fees, but simply rolling them into a package.
United's perk packages
United Airlines has become the latest to offer these packages. The Chicago-based carrier’s goal is to give more people reasons to upgrade from standard coach class to “premium economy,” which United refers to as Economy Plus Class. Other major carriers have a similar cabin class. Though the names are different (BA has “Premier Economy,” for example), the idea is the same throughout the industry: to give fliers a slightly better experience than they would have in regular economy class.
Airlines make different promises about premium economy. Some highlight better food, a complimentary beverage or more entertainment options. The one universal trait that every airline has is more spacious seating and more legroom. Rather than simply trying to sell premium economy seats, United has bundled other perks together to create different Economy Plus packages.
Paying for premium (economy)
For example, the airline has Economy Plus Essentials, which is a package that includes an Economy Plus seat and an additional checked bag (thereby allowing travelers to avoid its usual checked baggage fees). Economy Plus Enhanced is a more expensive package that includes the Essentials perks plus priority boarding, lounge access and a special check-in line.
All the perks offered in these two packages can be purchased separately. However, according to USA Today, United claims that the perks are up to 25 percent cheaper if bought as part of the Economy Plus packages rather than being pieced together a la carte style.
American Airlines, which already has seating that it calls “Main Cabin Extra,” has announced that it will be adding premium economy class seating to its long haul aircraft. AA’s premium passengers will get better in-flight entertainment, a free checked bag and a complimentary cocktail.
Some packages are not tied to premium economy class (or any other class for that matter). For example, American’s Choice Plus and Choice Essential packages cover checked baggage fees and allow for ticket changes without incurring extra penalties. The more premium of these packages include priority boarding, extra air miles and even an in-flight cocktail. Southwest has Business Select packages even though its planes do not have business class. Fliers get a cocktail, priority boarding and a dedicated security and ticketing checkpoint if available.
Why are airlines doing this?
Getting more people into premium economy class will help airlines fill the major price gap between business class and economy class. Some people want extra leg room and other perks, but they don’t want to spend five or six times as much to move from economy to business class. Packages that include a selection of other business class perks (cocktails, checked bags, etc.), can offer a better experience to people who want to spend more while also helping people avoid a la carte pricing.
Then, obviously, there is the up-sell angle. Packages make it possible for the airline to sell extra perks for a “few dollars more.”
Will packages like this become the norm in the future, or is this simply a trend that will pass? If, like United's new packages, these extra perks are focused on the underserved portion of the market between economy and business class, many travelers will undoubtedly find them attractive, especially if it allows them to forego the current a la carte pricing policies.
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