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American moving to a la carte pricing

Posted by Paul Makishima, Globe Assistant Sunday Editor  October 6, 2008 10:20 AM

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Amid high fuel prices and a soft economy, American is moving to a la carte pricing starting next year. The AP is reporting that American, which was the first (but not the last) carrier to start charging for a first checked bag, plans to embrace the kind of "unbundling'' model that Air Canada has been practicing for about five years.
This is the way it works at Air Canada: Consumers choose from one of four fare levels. AP says the top two classes of tickets, Latitude and Executive classes, "are fully refundable and come with priority check-in, food and other goodies included." Basic Tango class "requires extra fees for upgrades such as a food voucher, advance seat selection, flight changes and airport lounge access," AP writes. You can also save a few bucks by electing to forgo frequent flier miles or by not checking a bag (all Air Canada customers can check at least two bags free).
I spoke with Ned Raynolds, an American spokesman, about the changes. He said he couldn't discuss any details but said it was a necessary move to fill seats and remain competitive. He also pointed out that the notion of al la carte pricing was not entirely new. "Largely,'' he said. "we're already there.''
And it's true. For the most part, it appears that the changes will not be stark. If you're flying coach, you're already paying for things like a refundable fare, food, and airport lounge access. There could be some shifts -- here, I'm thinking of having to pay for seat selection.
So the bottom line? More nickel and diming. Sure. But I don't think on its face that this is a huge shift for most consumers. I think you can, however, safely argue that by codifying the system what this does is make clear that this new era of proliferating and escalating fees, of trying to find out what travelers value so are willing to pay a premium for is here to stay.

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