APEX Insight: Fully unbundled fares, or bare fares, packaged as basic economy may confuse some consumers accustomed to full service on certain airlines, but the strategy has worked well for low-cost carriers around the world. The key to success, says Routehappy’s CEO Robert Albert, is transparent, simplified merchandising.
Travelers are booking US airlines’ basic economy fares in droves, but some passengers have complained that they expected more services to be included, claiming that they were confused about the type of fare they were booking. Ultra low-cost carriers have had success with their bare fares model by setting clear expectations. Full service carriers, however, are perceived as offering more and customers may not read the fine print when booking basic economy tickets.
Today, consumers have a range of fare options available, but more choice adds complexity. Robert Albert, CEO of Routehappy, suggests that airlines make those options clear by using simple and clear markers of what is and is not included with the ticket. “It needs to be simple, straight forward but very repetitive about the restrictions that come with every fare,” he said. “The simpler the messaging the better.”
“The simpler the messaging the better.” – Robert Albert, Routehappy CEO
The idea is to make unbundled fares transparent, by using markers and descriptions customers can easily recognize. For example, green tick marks for features included and red Xs for items not included. According to Albert, transparency helps set customer expectations, which can avoid problems later. Simplifying the booking process by making fare details clear and including rich content descriptions can also encourage upselling of ancillaries.
The greater variety in fare packaging today isn’t only confusing to consumers. “We’ve gotten a lot of feedback from distributors that they can’t interpret the fares,” said Albert. “One of the things we’ve decided to do is to create a decoder in our API, using fare basis codes, which interprets and sends back the exact fares to distributors.”
IATA’s NDC (New Distribution Capability) standard is also easing the process of communicating features and options for tickets to sales agents. Developers working on various NDC applications are finding new ways to present ticket details, explained Albert. These may serve as inspiration to airlines. “I think we’re in for a good couple of years of experimentation and segmentation, there will be more options,” he said. “The more innovation there is in flight shopping the better off we’re going to get.”