Airline Pricing: Are Airlines About To Get It Handed To Them ?

After years of being the butt of pricing jokes and the hall of Fame for Revenue Management, I now wonder if the tide is really gone to turn on airlines.

They have increasingly unbundled almost everything as a pro-active strategy. But below is a blog from the travel industry itself that begins to raise real questions about the sageness of this approach - Eric Mitchell

Here is a blog from Senior Travel Blog
By Nancy Parode, About.com Guide to Senior Travel

Unbundling Airfares - Good Value or Money Grab?
Monday October 6, 2008

"The Associated Press reported today that American Airlines is giving serious thought to "unbundling" airfares. This pricing strategy involves charging all passengers a base fee and adding options or groups of options for an additional charge."

"American Airlines' approach to fare unbundling seems to be based on the Air Canada model, rather than the more extreme, charge-you-for-everything Ryanair system. Air Canada offers four fare levels, with different options and privileges included at each level. Options include meal vouchers, priority boarding and baggage handling and reduced change fees.

What do you think? Would you prefer this "unbundled" pricing approach, or would you rather pay one price and have access to all the "options"? Take our poll and share your opinion."

And another perspective from MSNBC: "American Airlines plans à la carte pricing"

Carrier to offer bare-bones services at base fees, charge for add-on items.

"American Airlines is about to accelerate the trend of breaking the cost of a trip into an airfare plus many smaller fees.

Starting next year, American, which led a stampede by U.S. carriers to charge customers for checking even a single suitcase, plans to imitate the a la carte pricing structure pioneered by Air Canada, airline officials say. There are likely to be a few basic fare plans, and travelers can pick additional services — for a fee.

Fans of "unbundling," as it’s called, say it gives travelers lower base fares with the option of paying for extras that they really want, from beverages to blankets.

Some travelers are wary, however, and suspect the airlines are just trying to chisel them a few bucks at a time."

Thoughts?