Airfare Pricing Segmentation for Baggage Cost Recovery
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Solution Overview
Problem
Current airline pricing systems fail to differentiate between passengers with and without baggage, leading to increased security risks and costs, as they do not incentivize passengers to limit their baggage, resulting in inefficient baggage handling and unaccounted expenses.
Innovation Solution
A system and method that allows passengers to pay a separate per baggage charge for transportation and security screening, providing options for baggage handling, such as using private parcel services or airlines, with pricing matrices that vary based on baggage choices, encouraging cost-effective and secure baggage management.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If the current airline pricing system is used, then passengers pay a single base airfare regardless of baggage, but this leads to increased security costs and risks without incentivizing passengers to limit their baggage
Solution Approach 1:
The airfare is segmented into separate components: a base airfare for passenger transport and separate baggage fees for each bag. This segmentation allows the system to differentiate between passengers with and without bags, enabling targeted security measures and cost recovery while maintaining passenger convenience through automated pricing at booking.
2Adaptability or versatility
If baggage is transported by airlines, then passengers can travel with their luggage, but this increases security screening demand and airline costs without adequate compensation
Solution Approach 1:
The system performs preliminary action by calculating and presenting the total airfare plus baggage fees to the passenger at the time of booking. This allows passengers to make informed decisions about whether to bring bags before incurring costs, and enables the airline to pre-arrange appropriate security screening and handling resources, reducing overall operational and security costs.
3Ease of manufacture
If the current unified airfare pricing is used, then the system is simple to implement, but it fails to recover security and handling costs associated with transporting bags
Solution Approach 1:
The system implements feedback by automatically calculating and presenting the total cost (base airfare plus applicable baggage fees) to the passenger during the booking process. This feedback mechanism ensures that passengers are informed of the complete cost structure, enabling them to make informed decisions while ensuring the airline recovers all security and handling costs associated with transporting bags.
Data Source
AI summary
A system and method is provided for categorizing airline passengers traveling with and without baggage and unbundling the baggage costs associated with the airfare to encourage separate parcel service use. In one embodiment, based on information from an online booking system, the traveler is allowed to choose from a variety of options addressing modes of baggage handling, and an online routine determines the associated costs for the options chosen, providing travel rates that vary from the typical base airfare.