Why Airlines Keep Creating Even More Types of Fares
Photo Credit: Shown here is the "first lounge" of Qantas airlines at the main international airport in Sydney, Australia. Qantas offers fare types like Red eDeal, Flex, and Businesss as a way to squeeze out incremental margin on ticket prices and defend against market share incursions. Qantas
Skift Take
Many airline executives insist that their so-called New Distribution Capability, or new method of sharing data for selling tickets, will hit a major target next year. But industry insiders say the target will be missed. To cope in the meantime, several airlines will expand the marketing for bundled fares under a confusing array of brand names.
Next-generation sales tactics for plane tickets haven't yet materialized. Airlines and technology firms have been slow to adopt new technologies, prices, and commercial models. In the meantime, some airlines are hoping so-called fare families or branded fares — where airlines bundle tickets along with extras like free checked bags in a total price — will be a stopgap fix.
Airlines have long wanted to move to so-called personalized pricing. They would like to sell online in ways that make it more difficult for a traveler to comparison-shop by the lowest price alone. Eventually, they want to promote tickets based on a traveler's spending history.
To achieve these goals, airlines need distribution channels like online and offline agencies to cooperate. The industry needs to adopt new technical ways to display their fares and other content. But change has been slow.
A case in point is the so-called new distribution capability. About 21 substantial airlines, such as Air France,
