"Brand" is the latest buzzword in airline pricing. Pioneered by American Airlines, the idea gets high praise from some of the airline marketing mavens. And if it seems to work for American, you can bet other lines will quickly copy the strategy. Here's how it works:
American's system uses three brands in economy: "Choice," the lowest; "Choice Essential," which adds one checked bag, no change fee and early boarding; and "Choice Plus," which adds no-charge, same-day flight change, same-day standby, a premium beverage and a 50 percent frequent-flier bonus. Pricing is designed to make moving up-brand attractive: For a nonstop round-trip San Francisco to New York itinerary in May, the bare bones price is $396, the midmarket price is $464 and the top price is $484.
Clearly, American could add many more levels. Levels including Wi-Fi or one-day entry to the Admirals Club lounge would seem likely candidates.
Although this sort of bundling might sound familiar, it's more comprehensive than the similar "fare families" approach that several other airlines use. As with branded fares, various amenities are linked to fare levels. But with the families, as the lowest fares sell out, consumers no longer have the option to stick with a bare-bones or a lower-level bundle. The two big Canadian lines -- Air Canada and WestJet -- pioneered this system.
The airlines and their marketing consultants see big benefits to branded fares. Among them is the fact that they draw travelers to the airlines' own websites.
And that has some big players in the industry in turmoil. Right now, the big online travel agencies and price-comparison websites (and the global distribution systems that feed them pricing data) are not set up to handle fare brands.
If, as I suspect, other airlines jump on the brand bandwagon, I see a big struggle coming up between airlines and these websites. Consumers, too, are in danger of losing the ability to compare fares from many airlines on a side-by-side basis. I think the online travel agencies will rise to the occasion, but they face a big challenge.
Contact Ed Perkins at firstname.lastname@example.org.