Originally Posted by
Land-of-Miles
All the cases studies I recall from Business School hinged on understanding where an organisation has a competitive advantage and seeking to maximise and retain that advantage.
On wide body aircraft the yin/yang seating config gives BA considerable competitive advantage (as BA can get more passengers into the same space and still offer a flat bed seat). Why would it make good business sense to give up that advantage?
The big customer base for CW is not individuals it is large corporates who care more about the price of an average J ticket than the relative comfort of the seat.
The smart thing for BA is to keep the current seating arrangement and cabin density for as long as it makes sense, accepting that some customers will defect to other airlines offering superior products but with an ability to undercut competitors should that be necessary and still make money.
If bookings start to fall to competitors then BA can cut ticket prices and still make money at prices that would hurt competitors with lower seating densities. That is how I see CW panning out and I think the current config or something very like it will be with us for quite a long time to come.
This approach won't work for some customers but losing a small number of customers is almost certainly preferable to cutting J cabin capacity.
Agree with all of the above apart from the tense - it "gave" competitive advantage. "Seeking to maximize and retain that advantage". Blackberry had a competitive advantage being secure email. Now other devices give secure email PLUS lots more. I see a lot of milking the competitive advantage (fair enough, it was great when it arrived) but I don't see a lot of retaining that advantage.
The next downturn is but a half cycle away...