Frontier recently introduced “AirFairs”–a play on words with “airfares”–where members can choose the amenities they would like with their flights. With slogans like, “When you choose for yourself, you get what you want” and “the fair way to fly,” the airline is banking that their customers will appreciate the flexibilty of choosing to pay for the perks they want or foregoing some perks for a lower cost.

We recently caught up with Jim Young, VP — Marketing, Sales & Distribution, at Frontier Airlines to ask about the new pricing structure and how it relates to frequent flyers.

You can also read the related story in this issue’s Inside Edition.

InsideFlyer
Why did Frontier decide to introduce AirFairs?

Jim Young
We heard our customers loud and clear about the frustrations and challenges they have dealing with fee changes in the airline industry, and they wanted to choose what they should pay for. In response, we created AirFairs, a pricing structure that puts the customer in the driver’s seat. Now customers can arrange their travel experience by selecting the fare type with the amenities that meet their budget and comfort needs.

IF
How long were you working on AirFairs before it was introduced?
Young
Work on AirFairs began in early June of 2008.

IF
When did AirFairs go into effect?
Young
The program took effect on Dec. 18, 2008.

IF
What type of research did EarlyReturns do before introducing the changes?
Young
Frontier facilitated several focus groups among base, Ascent and Summit members in the midst of finalizing the AirFairs program. Feedback from these groups helped us to identify what customers valued, what they expected and what we can do to maintain their loyalty. Feedback surrounding these concepts was considered in the final benefits structure.

IF
Do you feel that a la carte pricing will be a growing trend with airlines?
Young
Frontier’s AirFairs product is not true a la carte pricing. Rather it is groups of amenities bundled together in tiered pricing. Tiered pricing models offer benefits for both the customer and the airline alike. Because travel attributes and benefits are divided into “value bundles,” customers are paying one price for the things most important to them and airlines are creating cost and service efficiencies on the backend.

IF
How will members know which fare type is best for them?
Young
Several different charts on our Web site outline the various tangible and intangible amenities offered throughout the travel experience–and which amenities are included with each fare type. For customers who still aren’t sure, or who travel infrequently, there is actually an interactive tutorial that directs the customer to the appropriate fare type for them based on their answers to various questions surrounding travel plans and personal preferences.

Visit: http://insideflyerus.wpengine.com/link/?1387 at FrontierAirFairs.com

IF
How have EarlyReturns members reacted? Specifically elite members?
Young
For the most part, all members, Elite or not, have reacted positively to this new pricing program. Customers are thrilled that they can select the type of airline ticket that fits their needs based on their values and preferences and are happy to have clearly stated guides on the Web site to help direct them to the appropriate fare for their trip. In addition, most business savvy customers recognize the need for this change in business function from a customer satisfaction and profitability strategy/approach.

IF
Which of the three fare options has been the most popular so far?
Young
The Classic fare type has exceeded our initial expectations, with more than 20 percent of customers choosing this fare type.

IF
And if you can tell me, did you look at any other airline as a model for AirFairs?
Young
Air Canada was an early leader in the introduction of a tiered or “bundled” pricing model. Other international and domestic carriers are also adopting a similar approach.

IF
EarlyReturns is also doing away with a $25 redemption fee for awards as well as the $75 expedite fee for award tickets. Why?
Young
Effective Dec. 15, 2008, the $25 redemption fee and $75 expedite fee associated with award tickets vanished. While it was never our intent to impose fees or policies that would challenge some of our most valuable customers, we were faced with the pressure of astronomical fuel prices and a weakened industry earlier this year. Although we always have to consider our business in light of market conditions, we wanted to give a little something back to our frequent flyer members. So members may now redeem, fee free! (The $75 change or redeposit fees for award tickets still apply).