Montreal-based Air Canada launched a new spectrum of fare classes last week to better compete with low-cost carriers.
Like similar products at American, Delta, and United, Air Canada’s new fares include a “basic” option that effectively strips any perks from the ticket, and squeezes out ancillary revenue for amenities like checked bags or seat selection. Unlike American and United, though, Air Canada has taken it a step further to completely segment the economy cabin into five tiers where each fare offers a different set of perks and flexibility. In this way, the airline seems to be following in Delta’s footsteps toward precisely segmenting the cabin for specific types of customers and extracting revenue at each tier.
Frequent flyers may find the new fare structure disturbing as only the top three out of five tiers earn full frequent flyer miles. But for everyone else, the ability to purchase only exactly what’s needed on each ticket may prove useful.
— Grant Martin, Business of Loyalty Editor
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Skift Business of Loyalty Editor Grant Martin [email@example.com] curates the Skift Business of Loyalty newsletter. Skift emails the newsletter every Monday.