Merchandising Ancillary Revenue, Fare Families, Branded Fares and a la Carte Pricing

In an effort to overcome the perception of a seat as a commodity, and to increase yields and loyalty, a key initiative in the passenger transportation community is the introduction of branded products with their associated privileges. Consumers want more choice and more value, and whether a passenger carrier chooses to add ancillary travel or merchandising options to their website, the additional options should benefit most consumers. From a revenue management perspective, seats have always been sold from the bottom up - from the lowest qualified fare. However, with the introduction of branded products, a passenger carrier has the capability to sell from the middle or the top, based on a consumer's preference for the privileges associated with a branded product. The branded fare approach is one of the latest pricing methods used by airlines to boost ancillary revenue. This encourages consumers to buy a higher fare by including a package of defined amenities. Ancillary revenue product and service experimentation are evolving as we move forward. Airlines all over the world are adding optional extras such as pre-paid baggage, early boarding, assigned seating, and pre-order meals.