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Air Canada revolutionises airline pricing

Published: 05/01/2006 - Filed under: News »

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Air Canada's recently announced transatlantic pricing model might well be the future for airline travel. In effect it creates an a la carte menu, with travellers able to choose what they are prepared to pay for, and what they can do without.

The simplified pricing structure for flights to and from the UK classifies its business and economy class offerings into five brands: Executive First, Air Canada Club, Latitude Plus, Leisure and Tourist.

Irrespective of whether you intend to take business or economy (despite the name, Executive First is business class), everyone booking online is now quoted a range of qualifying fares when booking, say, a London-Toronto return. This is in contrast to most airlines which have rigid tariffs and do not explain what each fare type represents (ie: what you get for your money).

In terms of price, Air Canada's prices are similar to those of rival British Airways but where they differ is that the website displays every benefit alongside each tariff.  Passengers are then encouraged to upgrade or downgrade according to what they need and how much they are prepared to pay.

As Sean Menke, the carrier's Executive VP and CEO told Business Traveller, "What we are doing here is providing a la carte air travel. Different travellers want different things.  Our experience on the North American market (where simplified pricing is already available) suggests that travellers are keen to buy up to secure more perks."

But Sean Menke admits that Air Canada now has the machinery in place to convert today's free benefits like baggage handling and meal service into "paid for" options on all its routes.

All airlines are anxious to cut costs wherever they can and some of Air Canada's economy class passengers already pay for meals when flying within North America. Here in Europe, Scandinavia's SAS is looking to unbundle benefits and get passengers to pay extra for them.

"All we're trying to do," says Sean Menke, "is to help passengers put together the package they want." He stresses there are no immediate plans to start charging for such extras on international routes.

For more information go to www.aircanada.com

Report by Alex McWhirter

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