Air Canada’s pioneering fixed prices could be copied elsewhere
Air Canada’s revolutionary pricing option of fixed-rates is setting an industry standard that could be copied in some form or fashion by other carriers, say airline observers.
Air Canada recently started offering a flat monthly fee for anyone flying from Raleigh-Durham International Airport to destinations in eastern Canada, raising the question of whether other carriers in the US and elsewhere will do the same.
The fixed-rate plan is expected to appeal to business travelers who make frequent trips between the North Carolina’s Triangle and Canada. Beyond that, some analysts say, the plan sets an industry precedent and could be emulated in some form or fashion by other carriers.
“It’s a very important move,” Vaughn Cordle, chief executive officer of the Washington, D.C.-based Airline Forecasts, told the local business journal. “That’s where the airlines need to go.”
Under the Air Canada plan, customers sign up to fly within established geographic travel zones. The eastern zone, in which the Triangle is located, has numerous Canadian destinations, including Toronto, Ottawa and Montreal.
Pricing depends on a number of factors, including the length of time a traveler signs up for the service — with options being three months or six months.
Passengers also can choose between the so-called “Tango Plus” plan and the more expensive “Latitude” plan.
The Latitude plan offers more perks, such as complimentary seat upgrades and the ability to make changes to a flight schedule without having to pay additional fees.
A passenger in the eastern zone who signs up for the Tango Plus plan for six months would pay $2,202 per month, a price that includes all taxes and carrier surcharges. Tango Plus members also can upgrade to first class, but must use frequent flier miles.
Passengers can book flights up to one hour before departure through the company’s Web site.
Experts say the plan makes sense for those doing a lot of travel.
A major benefit of the flat monthly rate is that it takes the guesswork out of projecting how much will be spent on air travel. “It’s entirely predictable,” said Air Canada spokesman John Reber. “It’s easy to budget for.”
Report by David Wilkening
David
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