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What's Next In The Airline Economy?

Source: Media Article

Date: Feb 10, 2018

Source: https://www.bizjournals.com
Author: Brian King

No, this is not another article about polarization of America’s politics. 

I’m actually asking a question to Chicago’s home airline, United Airlines

Will we soon be standing on your flights with loop handles like my Red Line commute to work? 

I ask perhaps in jest, but at closer look, how far from reality is my question?

In the 1970s, a domestic airline traveler could pick a seat, have a complimentary alcoholic beverage, a complimentary meal, check a bag, carry on a bag for the overhead bin, and sit in a relatively comfortable seat in coach all for the price of their airline ticket. Things have changed.

Today, no domestic carriers offer free alcoholic beverages or meals when traveling in the U.S., and most charge for checked bags. 

Economy seats have shrunk. True statement. Premium Economy seats (for United, Economy Plus) are the same size as regular coach seats from 1978.

Enter Basic Economy

Recently, things have gotten more extreme. United Airlines created Basic Economy, a class that charges extra for seat selection, prohibits carry-on bags in the overhead bin, and prohibits any flight changes.

Now, it is an inarguable fact that there are some travelers who want this option, i.e. pay less and get from point A to point B. Sure, they’ll sit in a middle seat and only bring a backpack to put under the seat in front of them; they prefer the savings.

It begs the question, though — is United saving money, or making more of it, by doing this?

They have to train their flight attendants to serve in first class, prevent Economy travelers from sneaking into Economy Plus, prevent Basic Economy travelers from using the overhead bin, etc. They have to update their booking systems to support the now-lengthy list of a la carte additions for many classes, and govern future flight change requests against the originating flight class.

Whew. Complicated, if you ask me.

Is anyone happy?

In an attempt to satisfy everyone, is it possible that they created a scenario where they haven’t quite satisfied anyone? Does the cost of training, governance, airplane seating design modifications, systems modifications, etc. get offset by increased customer satisfaction and an increased client base?  I wonder.

It got me thinking, what if other industries followed suit? What if things customers historically took for granted became a la carte additions?

What would happen if you had to pay extra for the scrolling ticker at the bottom of an ESPN broadcast on TV? What would happen if you had to pay extra for a bar of soap in a hotel? What would happen if public transportation costs were different if you were willing to stand vs. sit? How would that be governed? And would the additional differentiation result in more revenue, or more costs?

A la carte purchasing is a great idea for fries with my burger. But I can’t imagine charging a client extra to create a project plan for a project they’ve asked me to manage.

Maybe standing on an airplane isn’t so far-fetched. Just saying.

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