The article I chose came from the New York Times, written by Martha White titled
“Airlines Find Travelers Accept Fees Wrapped Up in Bundles.” She explains and
discusses how airlines have been introducing bundles with add-on fees onto
their original base fares. Travelers seem to be embracing these bundles that
the airline company’s are offering, and is a win-win for both the company and
their customers. Airlines offer such bundles that are different from their
basic fares by raising the price of the tickets; however, these tickets have
more value than just the general airline ticket. They add perceived value by
naming the bundle with something that catches the customer’s attention. For
example, the author mentions the Delta Airlines bundle called a “Comfort Plus ticket”,
which provides travelers with a more enjoyable flying experience that consists
of more legroom, early boarding access, overhead bin storage access, and free
drinks. This bundle costs their customers an extra 48 dollars per ticket, but
the features of the bundle are appealing enough for some of their travelers to
upgrade and all the while making them feel like they have gotten more than a
fair deal. As far as the numbers go for the airlines, these bundles are
generating more revenue per passenger, which also in turn is generating fewer
complaints. This then translates to a more enjoyable flight experience that
leads to a loyal returning customer base. With the idea of bundling in this
industry, airline companies are saying that it is all about creating value to
the customer. Airline companies are offering different bundle options for their
customers, so they must decide which factors are more important to them. The
bundle they then chose would be a result of their own personal preferences, so
now the extra money they paid for the bundle is justified in their minds
resulting in higher satisfaction with their decision.
7 comments:
This is happening more in the industry and I think it will modify the industry. Although these bundles cost more money to fly, people like to feel safe and comfortable when they fly. Also, the bundles are a great way for airline industries to differentiate themselves in the mature airline industry. One thing I could see is low cost structured airlines not adopting the bundle proposal because it will not appeal to their customers.
I agree that customers gravitate toward "bundle" deals because flying is such an ordeal for so many people. Customers want to minimize their stress of traveling, and offering bundles with certain perks that make flying more comfortable. I also agree that it's something that could transform the industry. Perhaps in the future airlines will offer bundles with frequent flyer miles, as a form of reward currency. This would be an even greater incentive to spend more with airlines, revolutionizing the industry further.
I also agree that a lot of customers love these bundle deals. I have personally seen a lot of my friends taking advantage of such deals. This is more prevalent in passengers who are frequent flyers and especially travel in longer routes. A good experience and satisfaction from these promotions may build greater loyalty towards these brands which is a plus for the companies. Some of the more well-known airlines have already been offering frequent flyer miles, which has attracted a of customers. More companies need to step up and offer similar deals in order to hold their share in the market.
These so called "bundles" as the author is saying are things that other airlines give their customers free but at the price of a ticket. I could see why it would be profitable for Delta, an airline that has already eliminated these standard amenities, as people do respond to incentives. As a frequent flier, I can't justify paying extra for a bundle of items and services that are already offered for the price of the ticket, no extra $48 for a "bundle".
My point is this "bundle" is just a business strategy. The airline companies think they need to find a way to improve the high level economy class customers .So they come up with this kind of bundle. It is all about values. If the customers think this bundle is worth, they will buy is. If those high level economy class customers are not exist, which means all economy class customers do not want to spend extra money, the bundle strategy fails.
It's interesting that airlines are doing this because it shows how competitive the market is. Since companies can;t necessarily increase their airfare price without offering anything else to increase profits, they must add some benefits. The interesting thing is how much return they are getting from the slight increase in benefits. To me, $48 more for some extra leg room and free drinks seems drastic. I would much rather buy a water at my gate and tough out the compact leg room and not pay nearly $50 more. It will be interesting to see how far airlines go with these practices in order to differentiate themselves more and more and make profits.
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