Understanding unbundling

Given all the noise surrounding unbundling, ABTN spoke to BTMS 2010 speaker Roger Williams, a global leader in commercial aviation trend forecasting, publications and management consultation, to find out if it really is such a big deal.

ABTN: How is unbundling affecting business travellers, buyers and the airline industry?

RW: Phase II of unbundling occurred among full service or ‘legacy' airlines years later than their low cost counterparts and the initial roll out had a tremendously negative impact on our industry's reputation.

However, with our help, they have been analysing the pushback from consumers and the media and are taking steps to implement a more sustainable and transparent business model.

Unbundling gives business travellers and buyers more flexibility in purchasing decisions and more value with the continuing downward pressure on prices. But the real value will only come when legacy airlines fully adjust-down core pricing to correspond with additional charges making the overall cost of a journey manageable.

ABTN: Is there a magical formula for adopting an optional charge strategy for a win-win-win situation?

RW: There is actually, the reason why airlines in general don't do Web 2.0 Social Media well is because they have not learned to market with full transparency - a trait leftover from pre-deregulation. The same applies to unbundling. People are usually more upset about hidden or unexpected charges rather than the charge itself.

ABTN: Is unbundling the number one topic affecting the global airline industry?

RW: The industry has many pressing matters such as fuel prices, but unbundling certainly lives up to all of the attention it has received and it is unequivocally here to stay.

ABTN: Without giving too much away, why should buyers attend your presentation?

RW: Unbundling forms the base of what I refer to as the New Airline Business Model, which promises to be the answer to regaining yields that will never be found again under the traditional airline model. Understanding this process will allow buyers to identify lower fare trends and mitigate a complex product distribution process.

Roger Williams is a panelist on the keynote discussion ‘The Future of the Airline Industry - Hybrid Models, Unbundling and Striving for a More Competitive Service Offering' at 16:15 on Tuesday 9 February. To book conference sessions, simply register for a visitor pass at www.businesstravelshow.co.uk.