Live

Watch CBSN Live

American Airlines Gets Closer to A La Carte Pricing

From a customer perspective, the last couple of years of "nickel and diming" has been painful. It is a difficult experience for customers to have to take out their wallets multiple times to check a bag or buy some food. But airlines love the extra revenue they can generate from fees, so there has to be a way to keep revenues up while improving the customer experience. Air Canada figured it out years ago, and thankfully, American appears to be interested in going toward true a la carte pricing as well.

Air Canada has understood this for years, but US airlines have been very hesitant. Instead of introducing a true a la carte plan, they've just tacked on fees here and there to generate revenue but without thinking of the customer impact. When you go to aircanada.com, you'll see a few different groups of fares with the option to add or subtract components. The key, however, is that you only have to pay once. Do you want to check a couple bags and buy a meal? You can do it at the time of purchase so you only pay then. This way, airlines get their extra revenue while still making it easy for people to pay. And of course, the option to pay at the time of flight still remains for those who change their minds later.

With this type of structure, it becomes even more important to find a way to allow consumers to compare the actual prices they would pay on each airline. Comparing base fares will no longer be sufficient, but on the other hand, it will help airlines to highlight their differentiators. That's something that airlines have failed to do over a long period of time, but it needs to change. It looks like after several years of painful intermediate steps, we're getting close.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.