Survey into low-cost v full service

[fadec_primary_channel]

Item from Skynews reporting on a Barclaycard survey of no-frills airlines. See the link below:-

. .<a href="http://www.skynews.co.uk/skynews/article/0,,30400-1042230,00.html" target="_blank">Link</a>

In light of this limited research by one oranisation what is the reasoning behind BA's decision to spend £5 million on wooing business pax who according to this research would prefer a low-cost carrier?. . <img src="confused.gif" border="0">

[ 28 January 2002: Message edited by: fadec_primary_channel ]

[ 28 January 2002: Message edited by: fadec_primary_channel ]</p>

[twistedenginestarter]

Contrary to popular belief there isn't a crisis in back-end passengers. You can price them into a seat, and people seem to have done that.

When it comes to business, an executive can't say "Can I pop over to New York because it's cheap." He has to make a case. If people are tight on their travel budget they say "Do a conference call". Once you sow the idea that it is good business to go to New York, price doesn't matter so much. You've probably got BA as your preferred supplier so in flows some return on the £5 million.

On a more general point, my experience is business users (and who knows what that means) are quite willing to use no-frills if they are convenient. And that's the problem. There are ever more services from ever more UK airports so BA will lose market share irrespective of price and service level.

A big problem with BA is its service is hardly any better than say Easyjet as an end-to-end, door-to-door, soup-to-nuts proposition. You get delayed just the same and you have to spend hours negotiating boring airports - and as we know BA tend to go to bigger and more difficult airports than the no-frills.

[jnp]

I've just posted a question in the Bizjet/GA forum relating to this topic.

For current business class passengers (particularly groups of execs travelling around Europe), will the only alternative to 'no frills' airlines ultimately be business jet charter?

(I guess my forum name gives a hint at my feelings on this one!!)

[pdashley]

The problem(s) for business passengers travelling with low cost or no frills airlines only become apparent when things either go wrong or you need to change your plans at short notice.

If you purchase a full fare ticket with a 'full service' airline(which many business passengers still do) and

1 - If you pitch up for an earlier flight, there should be no problem getting your reservation changed(inventory permitting).

2 - If you no-show, no problem you can get a later flight (inventory permitting).

3 - If you choose not to travel at all, fine full refund.

4 - If the flight is delayed or cancelled, you can get re-routed, put up in a hotel, meal vouchers, change to another airline all with no (I accept no is relative) hassle.

Whereas with a 'low cost', as was demonstrated with a recent example of Ryanair in I think Belgium(apologies if it was somewhere else). .you are likely to get ****** all of anything and even minor things like turning up for an earlier flight are likely to cost you extra money(and then hassle claiming it back from your employer).

A business passengers choice of airlines is dictated by many things, corporate travel policy, cost, schedule etc, so whilst there are many business passengers travelling with 'low cost' airlines there are many who still prefer to travel 'full service' because of some or all of the additional benefits I outlined above.

[partagas]

PASH, agreed with much of your post and suggest you might find my comment on the Ryanair aircraft order interesting -(this forum, current topic ).

[PAXboy]

Pash: You have it one (or several!) This is why the 'seniors' and most 'sales' folk go full service. People in technical and supprot work are told to go on restricted Y tickets or no-frills.

When you explain to the company that getting the tech staff to the site of the problem to fic the problem so that the fancy pants people can start making money again ... "The board will not allow technical staff to fly Club"

Then I had to explain to my staff that they would be in Y. Oh yes, they also had to stay in cheaper hotels as befitted their status as 'erks' <img src="rolleyes.gif" border="0">

[FlyingV]

The value of 'full service' depends on how often you're likely to be let down by the no-frills guys.

If its only occasionally that you have to change/cancel a flight (or they cancel the service) then you just whip out the company credit card and grab the next available seat with any airline (or book into a hotel)

It would still work out cheaper over time to go no-frills.

Depending, of course, on how often such a situation arises.

I suppose for business travellers who never know where they will be from day to day, the only option is full-fare full-service, but for most it shouldnt be a problem.

In all my business trips over the years, I've only had to change a flight once. Definitely not worth paying too much extra for that.

Of course, I'm just an 'erk' <img src="smile.gif" border="0">

Regards,. .V.

[twistedenginestarter]

Sorry to p**s on your barbecue boys but, and I missed this first time around, it all comes down to who is paying.

If 'the Company' is paying and it doesn't come out of your budget (which I reckon is the vast majority of occasions) then your fellow man will pay 4, 5, 10 times as much as long as he gets his air miles. They may be worth f**k all but you cannot believe how venal most people really are.

Now say BA don't know what they are doing. I would hazard a guess that when it comes to loyalty schemes BA are the Manchester United.

Top Dog. Numero Uno.

What's Concorde for apart from an upgrade beyond anyone else?

[David Hurst]

There is an interesting decision process in the mind of the business passenger. The decison of who to fly with is a combination of frequency of available flights, proximity of the airport, cost of flight, service given, who is paying and urgency of the need to be at the destination.. .There is an imaginary line between, say, Heathrow and Luton presuming that Luton provides one daily flight to a destination and Heathrow provides, say, twenty flights.. .That imaginary line, marking the decision point of whether you travel to Heathrow or Luton, will move depending on the weight you give any of the variables.. .A person living in Luton, working for a multi-national and told he must be at the destination tomorrow or else, may well go to Heathrow. A person living in Hounslow, fancying a trip and paying their own fare may go to Luton. And every alternative between.

[flypastpastfast]

This is very interesting. In relation to business flying and whether budget carriers are used, it really depends on position (rank, if you like) and expediency. It is very similar to company cars, joe salesman absolutely NEEDS his car to do the job, but the chief executive has a company car (as a perk) that is worth maybe four or five times as much. But that is the nature of business.

The very top companies who wish to attract the very best staff available in a given industry segment will not instill a policy of budget/economy only, as to some extent it is seen as a benefit of working at the pinnacle of the industry. It is also seen as good business. Savvy company managers realise that flying budget can be a false economy, based around the cost per hour for a particular member of staff, i.e it is cheaper to fly a top exec fully flexible, rather than risk a four hour or more delay which costs a mint in wasted employee pay. It is about effectiveness and efficiency. The cost of the ticket itself is only one small factor.

If like myself, in a past life, you are weekly involved in flying around Europe (a process which often eats into your own time) you want maximum flexibility, minimum hassle (from check in to getting off) you want easy connections, minimum check in times, phone check in (on the way to airport), staff who at least pretend to care about you, more comfort, the ability to work and hold meeting in airports between connections (lounges). As almost all of your free time when not sleeping (in hotels) is spent in airports or cabs, you want a certain degree of 'your company trying its best to make your life as pleasant as possible'.

When I look back on past schedules, even if budget carriers could have carried me at one tenth of the cost, my time and effectiveness was more important to the company. For example, three European connections in one day, with meeting in airports followed by an overnight in Finland. The budget approach would have been cheap in ticket costs but COMPLETELY ineffective overall.

That is why business travellers still use full fare flexible tickets with proper airlines. A budget carrier may be fine if you only travel to say london every now and then, but a smart business will still book you on the most appropriate flight depending upon where you are going. One bad example I heard of was someone being flown to Luton with Easyjet in order to get to Southampton (cheaper ticket than flying BA to southampton), which meant the poor sod had to leav home at 4am one day, and didn't get home until after 10pm the next evening. Cheap companies will do that to their staff, quality companies would not. It's as simple as that.

Join a good company get a merc or BMW car, join a lesser company and get a ford fiesta. Likewise travel arrangements. It's why the best companies attract the best staff, and keep them.

Who knows, maybe bizjets will be the future.

[RVR800]

One of the major problem with BAs operation. .is that its great if your office is on the M4 . .corridor - if it's in the North East you will . .fly KLM - its nothing to do with price or low. .cost - it's to do with lack of capacity at LHR. .for commuters like the Fokker 50 which now fly. .to AMS..

Many successful businesses are miles from LHR..

[Kerosene Kraut]

See the traditional full fare pax habit eroding. Not too many people seem to be willing to fight for seat 1A to prove how important they are anymore while they can sometimes have more space backwards (like an empty row of eco seats). Full fare privileges have become too costly today. And one pays a fortune for a parking lot on some major airports these days. . .Will be a tough issue for the mainlines to compete in this new market without competing with their own traditional products.

[twistedenginestarter]

I think this no frills vs full service is actually a red herring. I think what it is about is full network - do you go to lots of places, and full timetable - can I get out very early in the morning and not quite so early, and back early afternoon and tea-time and late evening. BA do this.

If BA recognise this then they will stop trying to cull their routes/services. Unless of course they are going to surprise us all by actually delivering this mythical full service...

[ 29 January 2002: Message edited by: twistedenginestarter ]</p>

[Findo]

Twisted and Pash. A couple of points.

On the Glasgow to London route Ryanair offer everything that Pash says is a full timetable. 10 flights a day and a variety of times to suit all.

Even without the discounted restricted fares you can have a day return, fully flexible fare for half the cost of BA and bmi. That is low cost and fully flexible to me.

Do they operate a full route structure ? They currently offer 29 destinations out of Stansted so I would call that a substantial network.

<img src="wink.gif" border="0"> <img src="wink.gif" border="0">

[pdashley]

Findo - Nowhere in my post did I mention 'full timetable' I was only trying to add to the debate about 'full service' v 'no frills' by outlining what I see as some of the benefits of 'full service' airlines. However I could also have posted that with any full service airline you can also buy heavily restricted tickets that reduce the cost of your trip BUT also reduce the benefits if you need to change your journey. I was not making a judgement on which type of carrier is best, just sticking in my 'tuppence' worth.

[Gypsy]

Sounds like there is an assumption here that BA is a full service carrier. If it is, its second division in my opinion when compared to the likes of Emirates, Cathay, Thai and Singapore.

Where's Augustus Nutwinkle?

[keithmachperson]

I flew in the back of a "full service" airline's LHR to GLA last week. Lunchtime flight. Paper bag with cheap sandwich and soggy cake. If full service airlines want to show some clear blue water between them and the "no frills" carriers, shouldn't they at least try to make the service worth all that money? My company paid an ID50 fare of £150.

[Kew Tarse]

Pash posted a few comments earlier. Whilst I agre with some of them, he seems to think the low-cost airlines are totally inflexible. Not that familiar with the others, but certainly for easyJet

[1 - If you pitch up for an earlier flight, there should be no problem getting your reservation changed(inventory permitting).]. .You can normally change a low-cost ticket to another flight....it will cost you a change fee of around £25 but if the ticket is £100 less than a full service carrier then you're still in profit!

[2 - If you no-show, no problem you can get a later flight (inventory permitting).]. .Still some flexibility to change as above, depending how late you turn up.

[3 - If you choose not to travel at all, fine full refund.]. .True....you don't get this with a low-cost.

I guess it all depends on how often you travel and how much flexibility you regularly need. If you travel a lot and only occasionally need to make a change, then you're still a lot better off with a low-cost.

Q. Tarse

[52049er]

"Come in to my office for a moment Jenkins. Now we have a small problem in Europe that I want you to deal with. It does mean leaving home at 5.30 am tomorrow, and getting back at 8.00 pm, but it is rather essential that you go. Weve got you a ticket on LoCostAir, which does of course mean that if you miss the flight in the evening you'll be stuck in town for another night whilst your wife tries to put all the kids to bed, but it has saved us £100. Of course if we need to buy another ticket it will cost us cash, so if necessary you can stay in the local Travelodge. Thanks a lot."

"Ah come in to my office for a moment Jenkins. Now we have a small problem in Europe that I want you to deal with. It does mean leaving home at 5.30 am tomorrow, and getting back at 8.00 pm, but it is rather essential that you go. We've booked you a ticket on FullFareAirways which has cost us a bit more, but does at least mean that if you finish early you can catch an earlier trip back at no extra cost to us - and if you have to stay out there book yourself a decent hotel and just transfer the ticket to the next day. Doesnt cost us anything so feel free."

Thats why full fare airlines will exist and make money again - why else do companies like Hilton and Starwood make money even if they build a hotel next to a Travelodge? Theyre offering the same end product aren't they?

[pdashley]

Q Tarse

I take your point, I haven't actually flown on a low cost airline (so why is he pontificating about them then I hear you cry), but I have flown on 'full service' airlines and had all the things that I posted about happen to me at one time or another and I had no problems changing my flight. My impression of 'low cost' comes from things I've read on PPRuNe or heard about from friends/colleagues who have travelled with them, who have had problems. As I said in my later post I have no axe to grind with 'low cost' I just wanted to add to the debate.

[flypastpastfast]

Twistedenginestarter,

I agree with your point. Connectivity is part of the key. It is all very well saying you can change your budget ticket if you like, when they will not offer through ticketing. For example London to Amsterdam to Paris in one day, overnight in paris then back to say Glasgow. At every single flight sector, you must collect luggage and re-check in. And, the airline has no care if any of those sectors are delayed and a connection is missed. Its about efficiency, reliability, connectivity and many other factors which all together make your life easy when travelling ten days in a row. By the time you have been on six flights, the last thing you want is hassle. If I were say a student again, then I would fly (or bus/train) the cheapest way. The priorities in business are very different.

Budget carriers make a lot of fuss that they carry business travellers, and if it were the most convenient flight I would fly with the budget carrier. If I were travelling like I did in the past, and the company instilled a policy of budgets only, then I would be looking for a new job. People who do not fly a great deal, really have no appreciation of the effect it has on the body over time. Many companies who now insist on budget airlines only, are the type of companies who previously did not allow staff to fly (2nd class rail only).

I think you are bang on the button with BA and regional routes, connectivity is the key.

for all the budget fans, look, I didn't mention in flight meals once. That really is a red herring, and is not the reason serious business frequent flyers choose BA over say Easyjet. But after a full week of European meetings, it is sometimes nice to get pampered on the flight home.