Legacy airline introduces low cost revenue tactics . . .

[Pedota]

BA is going to charge a seating ‘premium’ on its already premium priced seats AND reduce staff meal allowances. I guess these LCC ‘features’ will be introduced here in time?

This is from today’s Airline Transport World . . .

BA finding more ways to boost bottom line
Monday September 28, 2009

British Airways is introducing a charge for pre-selection of seats on Oct. 7, claiming that the new "service will give customers more control over their seating options."

The fee is applicable only to those passengers wishing to secure their seats more than 24 hr. prior to departure. Within those 24 hr., selection will remain free. The new charge will come to £10 ($16.23) per person per sector in economy on BA's domestic and European network, £20 on long-haul economy or short business-class flights and £60 on long-haul business class. Exit row seats in long-haul economy cost £50 per segment and can be booked 4-10 days before takeoff.

BA also reportedly has found a way to save £2.7 million per year by cutting meal subsidies for staff. Manager-UK Customer Partnerships Division Raghbir Pattar told BA News that the airline "historically" has spent more than £6.5 million per year on feeding employees. "This is no longer financially feasible," he said. "Cost savings will be delivered through simplifying the food range, reducing opening times where facilities are underutilized and implementing modest and proportionate price increases" beginning next week, he said, according to press reports.

by Cathy Buyck

[Mr. Hat]

AND reduce staff meal allowances.

For every $1 you save reducing an employee condition you lose $10 in staff turnover and fuel burn (this one is instantanoeus). Happy staff = low turn over = low training costs.

Pissed off staff = inflexibility on duties and ineficient flying.

Its sad but true.

Unfortunately the lure of short term saving and snappy bar graphs in the board room are all to attractive to the "wannabee importants".

Happy experienced crew can make miracles.

Once the penny pinching tactics start the flow on effect takes a looong time to stop. Its the companies that increase benefits and find new ways of generating dollars that will win in the end.

[Pedota]

Here's another example . . . again from Airline Transport World.


Tuessday 6th October 200

Separately, UA [United Airlines] announced a "premier baggage" offering under which passengers can purchase a one-year checked-baggage-fee "subscription" that will allow them to check two bags for no additional cost when flying on the carrier. The "introductory price" for the subscription is $249, UA said. "The premier baggage subscription gives customers the ability to travel with a streamlined check-in process and additional convenience," Senior VP-Worldwide Sales and Distribution Jeff Foland said.

[Chocks Away]

For every $1 you save reducing an employee condition you lose $10 in staff turnover and fuel burn (this one is instantanoeus). Happy staff = low turn over = low training costs.

:D:D:D
Yes! The CEO's better realise this pretty damn fast, change their tune and not be all just words because pax numbers are up (Peanuts Daily), and China is back on the boil (http://www.centreforaviation.com/news/2009/10/01/double-digit-passenger-and-cargo-growth-in-china-for-aug-2009/page1)!
...big pilot shortage ahead!

[Wod]

I think you'll find that Raghbir Pattar told BA News that the airline "historically" has spent more than £6.5 million per year on feeding employees refers to running ground staff canteens.

Not a normal expense for most employers in the real world..

Nothing to do with aircrew.

[Mr. Hat]

Yeah I was referring to people that run companies based on cutting costs rather than revenue growth. A slight thread drift from me.

Some companies have a canteen but charge an allowance that automatically comes out of the pay. Awfully convenient and cheaper in some cases but not so good if you are trying to be disciplined with calorie intake.:E

As for the CEO's/managers well there are those that have the education and relevant qualifications and those that don't. The ones that do genrally don't have a problem striking a balance.

[frozen man]

what a shame:uhoh:, excellent meals used to available before the sim at cranebank

[Shark Slayer]

I guess the days of CC getting supplied a meal on board plus a meal allowance for the very meal given for free are over then?

[Metro man]

How much do I save the company when I ask for and get a direct routing cutting a minutes flying time ? Multiply that by number of sectors flown per year.

Carefully judge my approach to avoid dragging it in ?
Fly as much as possible at the optimum level ?
Request a more favourable runway for T/O or landing ?
Go the extra mile when ops request me to fly on a day off ?

I don't mind them screwing a bit of extra money from the customers, every company tries to do that. But leave me out, it will cost you far more in the end by having a high turnover of pissed off employees who don't give a toss about the company. The few $$$ here and there you save just aren't worth it.

[Zapatas Blood]

"Carefully judge my approach to avoid dragging it in ?"

Wow, so you ......just do your job. Doesn’t your aircrafts manufacturer make recommendations about when to configure. Mine does.

“Fly as much as possible at the optimum level?”

Now, this is a tricky one. So you go to the effort of looking down at the FMC and reading the optimum level? Fantastic. Takes a lot of professionalism doesn’t it?

“Request a more favourable runway for T/O or landing "

Wonderful. You really are saving the company from bankruptcy with this one.

[Mr. Hat]

So basically you are saying that a happy vs pissed off crew makes no difference at all to the overall cost of the operation so long as he/she flies as per the manufacturers guidelines?

I think over a large fleet small savings do have an impact on the bottom line - not sure about saving it from bankruptcy but certainly as my previous bosses have all pointed out "it all adds up".

[Zapatas Blood]

“So basically you are saying that a happy vs pissed off crew makes no difference at all’

Ahhh, yep. Pretty much.

It doesn’t matter how pissed off the crew are, if they follow SOP’s from the company and the manufacturer then there should be stuff all difference. If they chose NOT to follow SOP’s such as some twits here have suggested, then sure, it will cost money. Would you really throw the dunnies out at 20 miles just cos you hate the outfit that makes your house payments? Would you choose to purposefully ignore your optimum altitude just because the staff travel benefits are no good.

Sure sure, I have been around. I know the answer. Its just sad that in these times with concerns about fuel price/GFC/job threats etc, there are still cowboys out there that cant be bothered proving how professional they are.

Give it the spurs chuck.

[Mr. Hat]

Sorry I disagree, I think that crews can go the extra yard and think outside the square to find a way to improve on efficiency whilst also sticking to the SOPs.

I do it all the time regardless of what the company is up to as its the way i operate. Some however will purely stick to the SOPs and not trouble themselves with the extra effort of trying to do things better when faced with penny pinching tactics.

[Water Wings]

'Metro man' and 'Mr Hat' seem like smart cookies. 'Zapatas Blood' on the other hand.....familiar with Herzberg?:}

It doesn’t matter how pissed off the crew are, if they follow SOP’s from the company and the manufacturer then there should be stuff all difference. If they chose NOT to follow SOP’s such as some twits here have suggested, then sure, it will cost money. Would you really throw the dunnies out at 20 miles just cos you hate the outfit that makes your house payments? Would you choose to purposefully ignore your optimum altitude just because the staff travel benefits are no good.
Things are not so black and white my friend. You can follow the SOP's to the letter and still have a large dergree of flexibility.


“Request a more favourable runway for T/O or landing "

Wonderful. You really are saving the company from bankruptcy with this one.

This could add or save a huge number of track miles depending on the direction you are heading/coming from. How can you not see that? One route I fly regularly, if you do the SID to the South you can expect to add 20 track miles to the flight. Accept a Tailwind departure to the North(within limits as allowed for in the flight manual and SOP's)....and you depart straight on track, no distance added. Multiple this by 365 days of the year....this adds up mate.

LCC have generally had two options to stay afloat. Cut costs or become more effiecent with the use of your resources. Many managers take the easy way out which just goes to show they weren't very good managers in the first place. Take a look at Southwest. Pilot's pay is comparable with the Legacy carriers (in many cases better). Southwest is successful because instead of trying to screw down the employees, Herb Kelleher and his team realised motivated and satisfied employees were key to the airlines survival. Without a doubt the employees at Southwest are worked harder (i.e. more effiecent use of resources) but they are happy as well and that is the key.

Edited to also include Mr Hat as a smart cookie. He was obviously writing his post whilst I wrote mine.