ABSTRACT
As many airlines prepare to convince economy and low cost carrier (LCC) passengers that fixed-back seats are a better comfort option for flyers concerned about protecting their knees from the reclining seat in front of them, passengers in the front seats of the traditional full service carrier can expect to be offered a growing array of perks, from streaming video and music, often on their own devices, to gourmet, healthy meals prepared by renowned chefs. In between, airlines are exploring new classes of service that will offer passengers amenity and space options for a price (Reals, 2015). This differentiation in service is nothing new for airlines (see Chapter 9 for more discussion on airline differentiation). It is certainly familiar to any passenger in a deregulated air service market where market forces decide on price and service quality levels. As LCCs have gained market share across the globe, the idea of no-frills flying or paying for a growing list of amenities is an accepted trade-off for lower fares. Of course, the popular press has often highlighted carriers that have gone too far in their efforts to charge for additional services, as Spirit Airlines in the United States (US) and Ryanair in Europe can attest (LeBeau, 2016; Porter, 2014). Still, the International Air Transportation Association (IATA) has enshrined the idea of product differentiation and consumer choice into their New Distribution Capability (NDC) standard (IATA, 2016) (see also Chapters 13 and 20 for more details on NDC). Their argument is that airlines can best serve their customers by offering them a customised product that reflects their willingness to pay.
