The very young probably don't know this,
and the very old may have forgotten it, but there was a time when
airlines printed their fares on pieces of paper and mailed them to
their ticket offices, government agencies, business users and
travel agencies.
The paper went into
loose-leaf binders called "tariff books." Because a change in one
fare meant that an entire page had to be reprinted, users would
sometimes open the mail and find a tariff page bearing the notation
"35th revised page 267-B." Those were the days.
We think we've come
a long way, and we have, but recent events in airline pricing
suggest that our journey may be just beginning.
Airlines now
communicate their fare information electronically rather than on
paper, and fares change much more frequently than they used to, but
aside from its velocity, the basic process is still recognizable.
The fares database buried in every GDS is little more than a
storage site for the same data that used to arrive in the
mail.
A handful of
airlines, however, are adopting pricing practices that could take
the industry into truly new directions. The two latest examples,
appearing in our news pages today, are from Air Canada and Spirit.
Spirit is launching
several new pricing initiatives, including private sales and
"dynamic pricing."
Private sales are
as old as department stores, but Spirit may be the first company to
adapt the idea to the airline industry and couple it with a paid
membership.
Perhaps even more
entertaining is the prospect of "dynamic seat pricing," which could
involve, say, a surcharge for an aisle seat that would vary with
the length or other characteristics of the flight.
Air Canada is
building on its menu-driven approach to air fares with an expanded
array of travel passes for transborder travel under which users pay
a monthly fee for the right to book unlimited travel.
What these
initiatives have in common is that they appear to be, for the
present at least, incompatible with conventional GDSs. As with its
Tango fares, Air Canada is telling agents and consumers to go to
its Web site because GDS technology "does not provide for the
ability to distribute this product."
We knew the
Internet would change airline pricing, and it has. But rather than
changing the nature of things, the impact of the Internet has been
mostly to make things faster and more transparent.
What airlines are
now experimenting with are approaches to pricing that are
fundamentally new and different -- and tailor-made for the Web
environment.
Rites of
spring
No
sooner did we advance our clocks to the new version of Daylight
Savings Time than the weather cleared, our afternoons seemed a
little brighter, birds started singing, and the headlines warned of
rising gasoline prices.
Here we go
again.
It appears that the
fates are determined to make an annual event out of this
spring/summer run-up of oil prices. Summer price spikes came as a
surprise in 2005 and 2006, but are we now beginning to get
"trained"? Will we soon come to accept the rise and fall of fuel
prices as an accepted part of the rhythm of the seasons, like the
prices of exotic produce?
How quaint to think
of oil as "in season."