Tuesday, March 04, 2008

Is price the only deciding factor?

The airline industry is elastic. The product is perceived as a near-commodity by a large portion of the customer base. Many passengers are not loyal to an airline, but rather to their frequent flyer miles. Some passengers hardly even know the airline they are flying with, the type of aircraft, and probably don't even care. People are flying to go somewhere and not to actually fly. This is the air travel experience, not the cruise travel experience. When people book a ticket using a search engine, such as Travelocity or Expedia, they are presented with options ranked according to price and can usually be sorted according to other factors such as total travel time, connections, etc. Now a new website will launch soon which will incorporate subjective criteria in the search process. The website, InsideTrip, has 3 factors that are used in the booking process: speed, comfort, and ease. Within each factor there are 4 rankings. So, InsideTrip will basically use 12 criteria when searching for flight options for passengers. This is an interesting idea because there are passengers who do want to fly on a larger aircraft, there are passengers who want to consider on-time performance in their decision, there are passengers who value the lost luggage metrics. These are what many airlines use as selling points aimed at their customers, however that message is diluted among all the other messages that float around. Now InsideTrip will incorporate these metrics in a trip search.

My only comment is that passengers may find this worthwhile, however since it is a highly elastic product and market they may still select the lowest fare...as long as the airline gets them there near the time they would like to arrive. Is flying with Alaska, who may have a great baggage handling record, really worth $100 more than United? Many passengers may think yes, but United doesn't loose my luggage every time so I'll stick with United and save that $100 for the cab ride into downtown. Considering that InsideTrip is linked into Orbitz the site will only present users with more ranking criteria than Orbitz then they might as well use InsideTrip.

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