Tag Archives for pricing.
Former American Airlines CEO Doug Parker uses an Airlines Confidential “101 class” on revenue management to explain how airlines really make money — and, in the process, shows why American’s own cost-and-density strategy, Spirit/Frontier obsession, and mishandled Basic Economy put it on the wrong side of the industry’s premium pivot.
Delta is already letting an AI “Super Analyst” set ticket prices in real time, and this explainer breaks down how it works today versus where the technology is headed.
American Airlines, United and Delta all now charge more on some routes when a traveling is flying on their own than when they’re booking for two or more passengers – at least on some routes. But there may be a simple way around it.
The goal of any pricing strategy is to grow net revenue. That could mean charging a customer more. But it’s too easy to avoid higher AI fares. The real win is that AI can help airlines offer more low fares to more people without cannibalizing high fare revenue.
Twenty percent of Delta Air Lines airfares will be priced by AI by the end of the year, working to figure out how much each individual customer is willing to pay them.
Actor and television writer Kylie Brakeman undertook a project to better understand airport concessions prices. She settled on Chex Mix, and crowdsourced pricing from around the internet. People submitted photos and other reports of the prices they’d found, and she built a spreadsheet. What she found is amazing.
Take, for instance, the $27.85++ Sam Adams Summer Ale at New York LaGuardia that also incurs a 10% Covid charge that’s “not a gratuity for employees.”
When called on it the airport concessions company argued that this pricing was a ‘mistake’ but also a better value than they’re being given credit for.
This past week American Airlines CEO Doug Parker hosted a Crew News question and answer session with employees. He’s been doing town hall-style employee chats since he was CEO at America West and this was the first one done virtually. Instead of live questions, he had an executive who framed ‘frequently asked questions’ from pilots, and separately from flight attendants.
In the flight attendant session Parker laid out American’s philosophy on pricing which is that they will match low fares in the market, but they will not lead discounting. And he explained they won’t even always match fares anyway – because the people who have been traveling recently are the ones who need to regardless of the fare.
Major U.S. airlines have waived change fees for new ticket purchases, to encourage customers to spend money in a world of uncertainty. You won’t be penalized for changing plans if you buy a new ticket now and need to change it later – you’ll retain a travel credit for future purchases with the airline.
They’ve been extending the policy little-by-little, ostensibly because it might only be necessary for a short time. It won’t be. These change fee waivers on ticket purchases are going to need to continue for many months, perhaps through the end of the year. That’s not just for the convenience of passengers, but so that people will be willing to buy tickets at all.
Hotel Hotsheet reports that Marriott will roll out “Total Trip Pricing” — a commitment to show “all in” costs for their hotel rooms on their website. In other words, taxes, surcharges, and resort fees will be fully disclosed. Small steps towards a better world…
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
