Is history repeating itself? An interesting move by Flybe this morning sees the airline going back to a bundled approach except this time with a supplement.
And, it raises a number of questions around the ongoing IATA new distribution platform debate.
Flybe has introduced a ‘bundled’ supplement to simplify sales for agents booking its New Economy product via the global distribution systems.
The New Economy product, introduced earlier this year as part of the airlines Making Flying Better campaign, is designed to offer value via the inclusion of cabin and hold baggage, advance seat selection and itinerary change.
The problem was that the bundle had to be sold separate to the fare in the GDSs resulting in special service requests and miscellaneous charges order.
Now the airline and partners have got together to introduce the fare including the bundle supplement and everyone, it seems, is happier.
All of which begs some questions, could this be a way forward? If it’s that simple to bundle it up and add a supplement, why bother with potentially costly new systems?
One of the big arguments around the need for NDC is that airlines are hindered from developing relationships with customers in the current system, which IATA says has led to the ‘commoditisaton of air travel’.
But, here perhaps is one way for airlines to claw back some revenue, offer alternative products and still maintain transparency (a complaint against NDC).
Inevitably, it’s not that simple.
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Slightly aside from the topic above, are budget airlines turning away from the charging-for-optional-extras model? Examples in question are the Flybe example above, easyJet with their easyJet Plus and the newly announced ‘New Germanwings’ (http://www.whichbudget.com/blog/en/news/1496-germanwings-announces-new-brand-in-2013).
good point Martino,
wonder if it’s because passengers are fed up with optional extras or airlines can get more revenue this way or both?
Doubt it has anything to do with airlines listening to passengers [pinch of sarcasm]. Guess you know the old debate: does marketing create or satisfy a need? I think the airlines have overcomplicated the unbundling system and have inadvertently created the need for re-bundling. Now they’ll try to satisfy that need by going down the McDonalds way: bundle things into a meal and then try and push the customer to supersize it.
There is a point happening here. Flybe has not abandoned the ancillary charge. This is an additional approach. (The same can be said for the AA announcements yesterday). So as I read this – its not an either vs or argument – its an AND. And frankly that is not new.
if the airlines want to do they can do anything… its their product. If that is harder to sell – then I am sure that some smart chaps will come up with a way to handle it.
I will just go with – because they can – they will
Cheers
there are legitimate technical reasons why an airline might bungle the bag with the fair.
on many ticketed airline systems bags are paid for now with EMD’s (jargon alert, its a receipt) and some systems can’t pay for EMD’s with agency credit.
In which case the airline needs to bundle bags and flights, otherwise agents would need to pay for bags with credit cards and pay for flights with agency credit. messy.
i have no idea if this is relevant to Flybe
Ancillary is here to stay, for now anyhow by the look of it. The question is rather what the industry players impacted will do. How do they prepare for such evolution? Opposing to NDC is not a plan, nor a strategy
Spain’s Vueling has been doing very successfully for years what Germanwings is now implementing, too.
Back to a three classes system:
Economy – everything is extra
Business – flexibility is included
First – Everything is included
But, who cares about agency distribution of simple point to point products? If airlines are unable to build customer relations it’s because they just do the data mining “without the passion” of, say, a small hotel owner, who really loves his customers and tries to show at any moment.