A recent post introducing IdeaWorks’ latest report on A la Carte shopping is a fresh contribution to the ongoing discussion of a topic that is highly relevant in today’s turbulent airline industry.
Many airlines are adopting low-cost carriers’ unbundling strategies, while many others maintain a strategy of keeping a bundled product offering. Regardless of their strategic choice, Amadeus supports airlines’ different commercial strategies by providing the best and most cost effective technology to sell their products and services, including ancillary services, in a meaningful and competitive manner. We do it today, and we will continue to develop the state-of-the-art for the travel industry in the future.
In the North American market this was recently confirmed by Southwest Airlines’ choice of the Amadeus Altéa Suite for its international flights and Expedia’s choice of Amadeus for a multi-year content and technology deal.
So the debate is not about technology, as some may claim. The debate is about consumer choice and fair competition between airlines.
For some airlines, fees for services that are foreseeable (check-in, baggage, seat selection, to name but a few) are not clearly visible. The loss of price transparency that this implies is making it increasingly difficult for travel buyers and consumers to compare offers in the market, perhaps especially the not-so-savvy traveller. This is not good for consumers. In many cases this practice is making consumers take misguided decisions, since the advertised price of the airline is not a fair reflection of the final price to be paid for the trip, and the final price may be higher than the “bundled” offer of the competitor. This is not good for competition.
Amadeus is a strong supporter of consumer choice and fair competition. We believe there is a need for updating consumer protection legislation to clarify what airlines (and other travel providers) are required to disclose about their product, in the channel through which they choose to distribute their services. This is why we support Open Allies in the US, and why we welcome the recent initiatives from the European Parliament to strengthen regulations on price transparency.
At a minimum, we believe that consumers should be provided with transparent information that include the cost and availability of core services, and be able to act on these during the purchase process. If and when these services appear on the menu, then “A la Carte Shopping” makes a lot of sense.