Pricing strategies and compassion: why cut bereavement fares?

Given the storm buffetting the international airline industry, you'd think Air Canada would be taking advantage of every opportunity available to build goodwill and encourage customer loyalty - especially since the airline just emerged from bankruptcy protection and is competing against several strong domestic discount carriers. According to CanWest news, they have eliminated their discounted fares for bereavement cases and emergency medical travel in North America. Why? I can understand the economic argument: those discounted fares are a remnant from the old airline industry pricing model, where limited seat supply and poor competition created a perfect environment for an airline to gouge short notice travellers. Airlines - at the risk of appearing heartless - had to recognize that these travellers didn't fit into their normal customer segments and deserved exception from their oligarchic pricing schemes.

Today, pricing is driven by route-by-route competition among carriers, seasonal specials and web promotions. An Air Canada spokesperson has argued the discounts aren't necessary any more as their pricing is much more competitive, especially on the web. In effect, competition has outstripped their old pricing strategies. (Vancouver Sun, behind a stupid subscriber wall)

Fine. The airline's economic environment has changed. But why is WestJet, a discount carrier and strong competitor, continuing its bereavement discounts?

Because WestJet can look beyond its spreadsheets to see the customer at the counter. To see the human who needs help and compassion at a particularly stressful moment in their life. Who just wants a big faceless company to acknowledge their challenges and maybe offer some help.

And that extra moment of attention helps build lasting customer relationships.

A final point: Air Canada still offers these discounts on their international routes. Which gives the impression that their international customers are still paying extortionate prices, or are more favoured than their domestic customers.

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