orbitmic

Ah ah, it looks like my current French phone! When I joined my low cost provider, they sold something resembling that to me for a one-off €10 payment. Mine has no camera, no internet (just changing it in a bit as I have data allowance and might as well use it), and no calculator. But it works. It has not let me down (touch wood) since I first received it, and for all I know it may have been bough from some old Itineris stock!

@JOUY31 I also got myself and my main collaborator some iphones for work. At the time, I managed to negotiate a great deal at £15/month which includes unlimited data, some limited calls but free roaming (and UK calling prices) throughout the EU (a bit more but not much from the rest of the world). I hate phones and I think that it scared the people I spoke to when they came to discuss what they could offer! In a funny way, the said provider is Orange UK which seems to behave with far more commercial sense abroad (including in Britain) than they do in France!

San Gottardo

Thanks for that very interesting post, JOUY31. I thoroughly enjoyed reading that.

You have of course dodged the question of how AF would make the LCC model work, but rightly so since your point of departure is that this isn't LCC.

Still I have a question mark (in addition to the points raised by orbitmic and NickB). Let's leave aside the question whether we label this "LCC" or something else. We still do agree that AF does this to compete on price against competitors (airlines and other), and by "compete" we mean "attract/retain passengers that would otherwise be tempted to or actually use a competitor". With lower prices, yield goes down as well - the ancillary services do not compensate for the lower fares, and the cost structure is still high.

AF has followed this path for several years under PHG, basically driving up load factors by creating attractive prices whilst not finding a way to slash costs accordingly. Result was that they sold additional seats at a loss.

What is different in this case? The new name of the fare, the rules about baggage etc all make it sound fundamentally different - but how is it different from a situation where a carrier burdened with relatively high costs is attracting business py price?

cfischer

Very funny AF. Before the change to Mini I was looking at MRS-NTE and now AT THE SAME PRICE as before but under mini conditions they are offering the 'regular' booking classes @ 20 EUR MORE.

Does AF believe their customers are stupid

NickB

There is an article in yesterday's Independent which, although about Hop rather than mini-fares, is nevertheless relevant to the current discussion. I am not usually a great fan of Simon Calder* but I thought that what he writes in there might chime with the views of a few here.

*: for those who are not UK-based, SC is an air transport pundit to which a number of UK media outlets often turn when they want somebody to comment on consumer-related air transport issues.

orbitmic

I agree - both that the article is interesting and that it is better than his usual

One point, I think, is new to our argument and particularly noteworthy and which, in my view, applies to Hop, Transavia, and arguably Mini alike: when Calder suggests that one of the issues (apart from the obvious already mentioned here) with legacy-airlines-generated low cost operations is that the legacy airline usually 'designs' the low cost based on its own operations (or flaws therein). Indeed, he suggests that the one counter-example is Go where BA, while owning the airline, allowed its managers a free hand in designing her strategy (including systemic features, service strategy, and network). This to me, rings intuitively true. The difference between Go and all the other offsprings referred to here (including the AF ones) is that when it came to GO, BA said: "there is this low cost phenomenon and there is money in it. Let's not just leave it to Easyjet, let's create our own so that THEY get competition too". No pre-requisite, no transfer, in fact no partnership. By contrast, the other cases from Snowflakes to Transavia France via Ted work in a very different way. You have a legacy airline saying: "guys, this is not sustainable - we are losing money on [enter customer segment, airport, route, etc], the only way we can save this operation is by beating the low cost b*stards at their own game" and there emerges a "ghost government" of a new low cost class or airline, which in fact is constrained by the legacy carrier in terms of: (1) service (what will be the low cost part, what will be 'different'), and (2) the network (you'll take over this, this and that routes on which we think that you will make money while we lost some). Just spelling it like that makes it sound like a totally ridiculous business decision and yet, this is exactly what AF is doing after so many before her broke their teeth on it: "we will transfer loss-making leisure routes to Transavia", "Mini will first be operational on the ORY and bases Province routes and will keep offering x and y why no longer offering a, b, and c", "the regional network will be merged into Hop and operate most flights from LYS, BOD, NTE, etc".

This can't be right. Legacy airline managers (not just AF's) always seem to think that if [they think that] they can manage a legacy carrier, then they can manage a low cost operation, but clearly this is plainly wrong - the two are very different businesses (it works in both directions too by the way) and you can only manage one efficiently if you run it in its own right and for its own sake, not by default as what you screwed up as a legacy operator. Maybe if AF let an AF-owned low cost airline do low cost however it wants and wherever it wants, it would choose different models, services, costs, fare structure, bases, routes, or whatever and maybe it would make something work out of it but as Calder writes, history does not seem to speak in favour of AF's current ventures.

orbitmic

Thanks for confirming what some of us have been saying all along: the new Mini offer simply does not offer cheaper fares. It offers the fares that were vastly available previously on the same routes (and on some routes even higher fares than those available previously!) with much less service in return. This is AF entering the low cost identity without the low fares.

orbitmic

PS: Having looked at the past few pages of posts again, I realised that one think that is missing about our comments on the "Mini" initiative are more comprehensive references to existing historical examples of airlines choosing to offer mixed low cost and full service on their flights.

Some examples have been widely mentioned, but maybe we didn't fully explain them in case some people are not fully familiar with them:

- BD: A few years before its cannibalistic death [], BMI decided that its model was not a money maker. They experimented various combinations of low cost and full service. First they decided to go low cost on some fares but full service on other fares and for elites: part of the plane would, say, buy their food and drink and be attributed a random seat, others paying higher fares or with elite status could get a free drink and sandwich/snack and choose their seat, etc. This was an unmitigated disaster, resulting in the airline losing even more money than when it was full service, and it decided to change both its network (withdrawing from many European markets to concentrate on more obscure Middle Eastern and Central Asian routes) and its model, this time mixing destinations that would be full service (most flights lasting two hours or more would mean a full bar in some of the nicest hot wraps of all European airlines) and low cost service flights (shorter flights which would include buy on board, etc). Again, the airline continued to lose money and ended up being sold to BA by LH for a low amount.

- SN and SK chose a low cost meet full service model but based on a differentiation between discounted economy and full fare economy a la AF: full fare economy would retain the 'full service' but discounted economy would get a low cost-ish service, pay for food and drink but still have free luggage, etc.

- The models closest to what AF is doing with Mini are probably the two most disastrous experiments of them all: conducted by OK in 2007 (remember "Click for sky"?) and by LY in 2009 respectively (when U2 entered the London-Tel Aviv route). In both cases, the airlines would sell some low cost seats (either through their own website or through a separate website) within their own plane. In both cases, the passengers choosing that model would fly on the same plane as those flying the 'full service' product and get some/lose some of the services of the full service passengers. For OK, you lost all flexibility and after a short time luggage allowance but you retained the full onboard service of free snacks, soft drinks, and newspapers (rings a bell? ) on LY, the idea on the first experiment to FCO was to give nothing for free (same plane but you wouldn't get frequent flyer points and would need to pay for luggage, seat selection, food and drinks, headphones, pillows and blankets etc). Then it also evolved, this time to include basic onboard service such as drinks. In fact, from existing reports, while the ground and back office rules were clear, nobody onboard really knew how to treat the 'low cost' ers, like they could change seats, should receive drinks and meal, etc. and people would get different treatment on different flights.

Of course, these two experiments which are most similar to AF's equally resulted in unmitigated disasters and both OK and LY just decided to cut the losses after wasting enormous amounts of money in designing, marketing, reorganising IT systems etc to manage this new 'sub-economy within economy' offer. The brands of both airlines were also significantly and durably tarnished, and in fact, in the case of LY, the new strategy came just after a successful effort to improve premium class shares (through fleet renewal, service innovation) and that progress was reversed. For OK's it preceded a long desert crossing by OK which had received accolades as best central European airline from several sources in previous years. Of course, it is always hard to know what is the chicken and what is the egg (did the stupid experiments really make things much worse or did they just cost money without helping in any way) but either way, they certainly didn't work.

cfischer

kicking my ... for not buying it a week ago

Clearly AF is trying to get into the LCC business, but of course fail miserably because they are not structured to compete with LCCs. It is sad to see this happen a carrier I once loved to fly and now avoid at all cost unless there is no other option.

CGRA

My 5 cents : Just checked some dates for ORY/ NCE the mini rate is the same rates that what I used to pay as "classic rate", but it seems that I have to pay for bag , can't change / refund the tickets (used to be possible as traveling as a Family), no seat, no miles...
There is also no refund option even for the classic fare (used to be possible as traveling as a Family),
it's very tempting to pay EURO 20 more to have the classic rate. (especially at EURO 15 per bag)

To summarize : pay more for classic fare and have a little less

It'll be more honest to just increase their rates than to claim reducing them....
Their marketing people are "interesting" and believe that we're all stupid

JOUY31

Well, with respect to refunds, it was not possible with the previous standard fares, so there's no reason why the new CLASSIC fares would allow them. The Family fares are specific typological fares which are among the lowest fares, but with some of the flexibility of the highest (PREMIUM, not CLASSIC) fares.

San Gottardo

So if the differentiation doesn't come from lower fares but the change consists in taking away baggage allowances, mileage credits and seat selection, how is this not LCC for the customer?

CGRA

Yes you're fully right , AF is playing the LCC on these domestics routes BUT without matching the LCC rates....

CGRA

Thank you Jouy31 for the info.
So today vs yesterday :
- Not only I have to pay about EURO 20 more for their "classic fare" but in addition I don't have anymore the flexibility of the Family fare

---- Pay more : ok I can understand that cost of living is higher and staff is expensive and blablabla (we're good with blablabla in France
---- Less flexibility : OK I'm fine IF I have to pay less.

However less flexibility at a higher rate is a double no.

As most of you know, AF is often speaking about down sizing but it's not that easy in France, especially for large corporations.
They do need money so that may explain their "interesting" marketing.

JOUY31

May I ask why you are no longer using the Family fare? Has it gone up, too?

CGRA

That's a good question
Is there still a Family fare ? How do we book it ?
Before when you indicate 2 pax, AF system ask you if you're Family.
No they don't ask it anymore and give you either classic or mini , only 2 choices regardless how many pax are traveling