Airlines / Baggage Fees / Basics. / Unbundling

Is Unbundled Pricing A Cure All?

Unbundled pricing is not a panacea and it is not for very product and service. In my previous posts I talked about the cases where unbundling is not the right solution. Five reasons to not unbundle pricing Do not use pricing to solve operational inefficiencies Brand erosion from unbundling (Hulu and  Networks) However unbundling is … Continue reading

Airlines / Baggage Fees / Behavioral Economics / Consumer Behavior / Economic Model / Unbundling / Uncategorized

Unbundling the Airline – Charging for Water, Coffee and Soda

In August 2008 US Airways unbundled its in-flight service and started charging for soft-drinks. It charged $2 for soda and bottled water and $1 for coffee and tea. After six months, US Airways decided to stop the practice. US Airways took pride in its unbundled pricing model. The service did bring in revenue according to … Continue reading

Airlines / Baggage Fees / Unbundling

Airlines Unbundling Leads To Further Differentiated Pricing

Unbundling of airline services enables them to offer further differentiated pricing, hoping to extract more of the consumer surplus from those with higher Reservation Price (RP). Take the case of extra fee for baggage. Airlines forever had allowed passengers to check-in two bags. Now this service is unbundled from the airline ticket and passengers are … Continue reading

Airlines / Segmenting / Unbundling

Singapore Airlines- Refusing to Unbundle

A major airline that had made superior service as its differentiation is Singapore Airlines. It was recently featured in a Harvard Business School case study. Professor Rohit Deshpande, the case author, was recently interviewed by Harvard podcast team. Deshpande argued that customer service is a better stragety that trying to generate more revenue from what … Continue reading