lost_in_translation

For those trying to understand what BA is currently doing to its long-haul services, this article is quite interesting (OAG generally has quite interesting content) - http://www.oag.com/blog/the-developi...ow-cost-battle

Effectively, given BA's huge reliance on the TATL market they are almost uniquely exposed if this market trends increasingly towards LCCs. (Please note that I am neither condoning nor attacking BA's choices in this post.)

flatlander

BA think the future of economy long haul is what Norwegian offer now and realise the current reality of economy short haul is what Easyjet offer now. They also think there is a market for premium service for business travellers with reasonable (if not high) margins.

Hence the increased density and decreased service in Economy and plans to improve Club World.

ajeleonard

What gets lost in all the bleeting and whinging on here about BA is that it is clear a conscious strategic decision to lower their service levels and consequently costs.

They're trying to respond to two key trends, the increase in LCC competitors on long haul (and that most people book based on price), and falling global prices for business class.

They will of course charge as much as possible and provide as little as possible. They'll only drop their prices where they actually have to, and usually that's not for non-stops from London.

hmorgan883

But surely if their service matches the LCCs why would you then fly BA? I don't think people in Y buy purely on price and many travellers in Y are on business. A little extra comfort and decent service is why you'd chose a full service carrier, unless there was a massive scheduling imperative.

lost_in_translation

I (partially) agree but I suppose my point is there isn't the same LCC competitive pressure on, say, routes between Europe and Asia yet, so BA has arguably boxed themselves into a corner by focusing so heavily on the TATL market.

Andriyko

Because not everybody flies because of service. People fly due to convenient airports, schedules, network, FFP, or whatever other reason that may be unknown to us. Very few put the 'service' first.

I have for long believed that BA sees a bigger picture with market trends and research. Many here believe that since they value a free G&T and something to eat then everybody else surely must as well.

BA's passenger numbers are growing so it either means that BA is not that expensive or that it is expensive but passengers still find value in it.

Worcester

BA (and by extension IAG) are certainly doing better than their peers, but I just don't see how they can compete on price give their pensions deficit and use of the very expensive main hub of LHR and other legacy costs. If their service only matches the LLCs but they are still more expensive how is that going to work?

ukgooner

This forum is populated by people who get a certain pleasure from flying, enjoy the peculiarities of the loyalty scheme and dedicate a certain amount of time to discussing the minutia of flying. There is also a little bit of champagne tastes / lemonade budgets (after all, this forum is predominantly about gaming frequent flier schemes - or it lease it was until more and more energy has been devoted to discussing perceived service shortfalls or making endless comparisons to middle east alternatives*).

The majority of the market has other priorities - getting from a to b as cheaply and efficiently as possible, with as much comfort as their budget allows. BA doesn't have to be cheapest in Y - but does have to be comparable to the LCC headline fares. And there is perceived quality in the brand, the people, the Heathrow hub, and the choice of M&S as the BoB offer. The loyalty scheme and options to upgrade occasionally also help, not to mention the availability of lounges for those with status. The route network also allows corporates to make greater commitment, which helps to shift those higher flexi-fares.

*I take these with a punch of salt, as I imagine does BA.

Swanhunter

Anyone remember another UK airline that tried something like this? I think they called it modularisation. Ended well.

ahmetdouas

BA load factors are down as mentioned earlier in the forum. Passenger numbers are irrelevant if you have more planes flying them and more destinations. It's how full your plane are thats important!

Often1

This.

Moreover, many of these same people may be the "passenger" but not the "customer." They want to fly long-haul F/CW, but only when their employer, a FFP such as BAEC or a discount coupon pays for the ticket. If there were only 4 fares.

Indeed there is no such thing as a free lounge, a free meal, or free spirits. It is all about where the cost of these items is charged off. If one pays for these items personally, it may well make sense to have them included in a single ticket price. But, if one's employer is paying, why would the employer pay when the employer does not pay for these luxuries on a daily basis?

The market movers these days are large corporate customers. When they speak, BA listens. Their current speak is to provide a safe, secure and convenient product which moves people from A-B.

Above that, BA will likely be able to justify premium cabins. But, consider that DY is to offer US-EU Y fares in the $250 range, the question becomes just how much people can whinge about the champagne choices at BA lounges and whether the starter is served on a square or a round plate, before their employer suggests that the fare difference is not worth it.

So, why fly BA over DY? For the productive worker - schedules, reliability, IRROPS recovery (there really is a backup aircraft and crew somewhere), destinations, network (nothing is seamless, but between internal UK on BA short-haul and AA domestic, one can connect from almost anywhere to anywhere). In a world where time is money, most can manage on a plate of pasta and chicken across the Atlantic.

Andriyko

Passenger numbers are relevant when one asks who will fly BA. Those very passengers whose numbers are growing. The load factor dipped last month but grew year to date. And do not forget that extra capacity can always be cut.

ahmetdouas

Dont forget BOB still hasn't come yet. Lets talk about that in a year when the impact is felt. I now know that all 4 people in my family refuse to fly BA except me on the Avios tickets from my credit card, but thats hardly earning BA a lot of cash = )

kanderson1965

This however means that expensive assets are being under-utilised.

Dover2Golf

At the moment there just about might be but it's being diminished all the time. Once that's on a par with Ryanair how will they justify their higher fares then?