Air Canada last month expanded its simplified fare structure to 10 U.S. markets and announced plans to implement by this spring the six-tier format to all 80 U.S. cities in its network, including those served by United Airlines codeshare flights. The first transborder markets to get the new pricing design are: Fort Lauderdale, Fort Myers, Las Vegas, Miami, Newark, New Orleans, Orlando, Phoenix, Tampa and West Palm Beach.
Depending on their position within the structure, the six price categories include various advance purchase requirements, degrees of flexibility, frequent flyer point accrual ratios and change fee levels. The upper tiers provide priority checkin and baggage handling, along with other perks. The lowest level, Tango fares, is available exclusively at aircanada.com, where customers can make changes to reservations.
The fare structure last spring was introduced in the domestic Canadian market. Air Canada said online sales since have tripled, accounting for half of all domestic tickets sold. Of those tickets booked online, half were generated through a dedicated travel agency page on the Web site.
"The simplified structure is part of the solution that will help the overall health of Air Canada," said Sam Andraos, president of Aim International Management, a Toronto-based T&E consulting firm. "It was simply ridiculous to have 17 fare types between two cities that are one hour apart."
Though several low-cost carriers use uncomplicated pricing structures, Air Canada is one of the first traditional, legacy carriers to simplify fares throughout the North America market. Major U.S. carriers have dipped their toes in the airfare reform waters by testing a streamlined structure in select markets or on a test basis. America West was the first and, thus far, only U.S. major to take the full plunge (BTN, April 8, 2002).
A simplified, transborder fare structure is one element of Air Canada's strategy to drive traffic on routes between Canada and the United States. Another is a deeper focus on transborder corporate sales and plans to deploy dozens of regional jets on transborder routes. The carrier expects to complete a court-supervised restructuring in April.