Originally Posted by
JOUY31
Is EUR 1,800 for two transatlantic business class tickets sustainable in the long run ? This strikes me more as something akin to desperation for an airline that is extremely reliant on transatlantic premium traffic and who suffered a 17% decline in premium traffic last month.
Still, until we have the same type of data from the three majors, this is pure conjecture on my part.
Indeed, ex-LHR traffic has been badly affected by the financial crisis as City busines was a main source of premium travel. The 17% decline is year-to-year between April 2008 and April 2009. This decline is inflated by the fact that Easter vacation was in April 2009, but in March 2008, so premium travel was lesser during April 2009. Nevertheless, premium traffic in April 2009 was boosted by all the BA sales, so the drop in premium REVENUE is probably larger than 17% drop in premium TRAFFIC.
The question however is whether the reaction of BA (and many other airlines) is a "desperation" move or simply quick reaction to market conditions. The alternative chosen by AF seems to be to do nothing and then have a policy to upgrade pax who pay a very low coach fare (see many posts). Of course, the situation is bad for all airlines, but is it better to fill premium seats at €1800 or with upgrades who paid €800 (a typical longhaul coach fare)? I trust BA to be very reactive when the traffic picks up again.
The sad story for ex-CDG pax is that premium fares are much, much higher than ex-LHR or ex-FRA/MUC. Of course, that's good for AF, but FB posters should not forget that a large proportion of its premium LONGHAUL pax are either transit pax or point-to-point pax originating abroad. So AF has a different pricing policy for pax originating abroad. Now, AF policy seems to compete on price to attract them, not on the FFP. That's a choice. Other airlines have been proactive in competing both on price and FFP bonuses.