JOUY31

I think we've been over this already. It depends whether you compare the regular fares or also include the AF promotional fares that were arguably often available. With respect to increasing the price with the removal of the checked baggage, it is only an increase if you have checked baggage, which most travellers here argue they would not use. But again, the arguments have already been made on both sides.

For me, the two major routes from Paris where I can compare mini-fares with an LCC, using as orbitmic put it, the same airports, are ORY-TLS & ORY-NCE. In the past, when I compared fares, the price differential was around EUR 40, which was not a problem, as it was below my personal threshold; it was a problem when travelling with friends and not being able to use typological fares. Now, on the few dates I've checked, the price differential ranges from non-existent to EUR 6, so it is even more a no-brainer for me, and can be acceptable when travelling with friends. And on these routes, AF is not overall "twice as expensive." Everyone can compare the prices between AF and LCCs for a specific route and on a specific date, and then make their choice, based on their price sensitivity and other preferences.

orbitmic

"Routinely twice as expensive" (which is what I mentioned) is not quite the same as "overall twice as expensive"

I think you and others are right to mention that circumstances will vary by route, day, time, etc, but while I am not trying to be mean to AF, here are some examples of where my 'routinely twice more expensive' comes from. Three different routes, three different months, all calculated now which is a time when Easyjet is not having any sale or special offer:

- If you want to book a single Nice-Paris in February, there are 21 out of 28 days when the cheapest AF Mini ticket of the day (including all taxes and fees) is over twice more expensive than the cheapest U2 ticket of the day (including all taxes and fees).

- If you want to book a single Nice-Lille in March, the cheapest AF Mini fare (including all taxes and fees) is at least twice more expensive than the cheapest U2 ticket (including all taxes and fees) 40% of dates (and at least 50% more expensive than the cheapest U2 fare in over 75% of cases).

- If you want to book a single Nice-Venice in April, again, the cheapest AF Mini fare will be at least 50% more expensive than the cheapest U2 fare every single week of the month (the two airlines don't fly on the same days so it makes the weekly comparison more logical here).

Admittedly, if you are booking your AF trip 3 or 4 months in advance and miss Easyjet's sales and special offers which take place several times every month (there have already been three in January), then the difference can be minimal but even in this 'worst possible case' for Easyjet, AF is usually a little bit more expensive and that was exactly the same before the introduction of mini fares anyway as the cheapest fares were the same (or cheaper) and available as singles on all these routes if booked either any time for most fares or at least 2 or 3 weeks (I believe) in advance for domestic fares. And then conversely, if you wait for the regular U2 sales to buy your ticket then the fare difference will often be huge.

San Gottardo

Sorry, I just don't get it then.

Air France since some years already has an issue with not attracting/losing passengers to other carriers that are less expensive. As a response they launch MINI, to be competitive on the fare front.

It now turns out that AF is not less expensive, but has merely i) expanded the times and routes at which it offers fares as low as EUR 49 (those that were previously called a "promotion" and ii) in return withdrawn a number of service elements.

So if it is not less expensive, AF does no longer capture all those passengers that pick their airline based on price.

Let's then assume (sorry, I am an economist ) that AF has not become less expensive but that merely "the fare differential has become smaller". Fine, so AF targets those passengers that would take Air France for all it has to offer and would be prepared a little more for it (but less than before), but that so far did find it too expensive. Now that the price is no longer an argument not to take Air France anymore, what else can it be? Previously AF could argue to offer a full service product including some free baggage allowance, no free seating and an attractive frequent flyer program. But those advantages have now gone. So what other elements remain that would make a customer select Air France? Newspapers and a free snack. So, the result is that Air France does not attract new customers/retain customers because it is less expensive, but only those that are prepared to pay slightly more for a newspaper and a free snack.

It then also turns out that this "slightly more expensive" fare is often not available, but that the fare differential is much bigger on many days and routes. So even those people that are prepared to pay a little more for a newspaper and a free snack are no longer attracted on those days and routes, because they'd end up paying a lot more for that newspaper and free snack.

In the end, what starts out as a major initiative which floods the AF website with interested customers and is perceived throughout the press and lots of the public as "AF now becomes a low cost airline" ends up being an initiative where AF may attract some passengers that on some days and routes are prepared to pay a little more for a newspaper and a free snack. Lots of marketing cost, lots of hype - all that for this?

Add to that my serious doubt that these fares produce a healthy yield, the end result may be that AF doesn't even make money with this.

Hence my question: why?

JOUY31

I would say a good marketing exercise, dressed up differently from ordinary promos, with another step in the marketing campaign tomorrow January 28th that may inch slightly closer to an LCC approach through a greater emphasis on point to point traffic and costs that are lower than AF mainline. Not my cup of tea, though. Or, in a more francophone mode, les tarifs mini (et le pôle régional France) ne méritent ni cet excès d'honneur, ni cet excès d'indignité.

orbitmic

... and lose (1) those who were prepared to pay slightly more to have a 'no hassle' service (such as what BA and LX can still claim that they are offering) and (2) those who were prepared to pay slightly more to keep a high FB status, because both those types would now always need to pay €40 return or €20 more each way on top of the said 'slightly more' to reach that 'no hassle' and 'route to requalification' stage.

And of course, the fallacy of the "€20 value" of classic is exposed by AF's own pricing structure: book NCE-ORY, LIL, LYS which offer mini and the "new" great fare is €51. Now book NCE-TLS which only offers 'classic' because it is operated by regional and the "new" classic fare is €61.

Anyway, to go back to the calculations of our economist friends San Gottardo, I guess the worth of AF's initiative will be decided by whether the following is positive or negative:

[extra income of those who choose AF because of this new 'marketing' + extra income generated by those choosing AF for this elusive "smaller differential" combined with attractiveness of free soft drink and sale/sucre + extra income of those who end up buying extras such as upgrading to classic or paying luggage fees + money saved by not carrying luggage of people who will choose not to check a bag because of the lack of allowance + money saved from people who will buy because they bought a non-changeable mini-ticket and their travel needs have changed] - [lost income from customers who used to pay more to fly AF for the 'no hassle' experience + lost income from customers who used to fly AF because of their interest in qualifying for FB elite status + lost income from customers furious to be charged for luggage or not being able to seat where they want on a full service airline + lost income in terms of reputational capital including from people like me who feel that AF's nature and identity is changing and ceases to be the sort of airline I feel I would intuitively trust for my premium travel (i.e. if you know your supermarket is selling rubbish quality bread and butter you are less likely to go there when you want to buy your quality steak and your foie gras) + money lost from people who will stop flying AF because they needed to buy a new ticket because they originally bought a non-changeable mini ticket and their plans changed while all U2 tickets are changeable]

The equation admittedly lacks parsimony but I suspect that somewhere hidden in there is the key to what will happen. I know where my guess is but more than happy to wait and see...

brunos

Again, I wish to repeat a point that concerns me directly, as well as a significant proportion of domestic pax. On some touristic destinations, I would have guessed that youth, family, seniors were majority on many flights. And those have no elite+ status with lounge and bags benefits.
What is now called FlexTypo used to be the cheapest fares (or among the cheapest) available. Lower than most inflexible fares. Over the recent past, they have reduced access to this fare (couples, 60-65), made it much less flexible and raised it significantly. With the introduction of Mini, they now have made it even more expensive than in the past. Many of former FlexTypo pax will move to Mini and stay with AF. Others will seriously consider U2.
Just comparing current Mini with U2 fares, or past lowest-AF-fare with current Mini does not tell the whole story for domestic flights. The gamble in raising FlexTypo fares, while reducing their flexibility, is that most pax will accept the higher fares or move to Mini, rather than leaving for U2. Having selective pricing for different types of pax was specific to AF as it is not practiced by LCCs. The attractiveness of these fares being reduced is in line with LCCs, but that might be dangerous. Time will tell.

San Gottardo

January 11:

January 26:

Hear, hear! An interesting shift in nuances

Seems like over time we're getting to the point where we'll recognize that MINI and HOP are in fact LCC offerings (except for fares).

JOUY31

A fuller quote?
The last part of the sentence is, in my eyes, meaningful

With the added benefit of lower costs in comparison with AF mainline, including bases province flights, in the three subsidiaries: Britair (220 daily flights), Regional (300 daily flights) and Airlinair.

orbitmic

[Emphasis mine]. I think that in many ways, the boldened part (and the way it differs from how some of us talk about Mini) is at the heart of the two conflicting narratives that will determine whether the AF strategy is costly or not in terms of reputational capital.

The AF narrative, which I think is also your perception is that: nothing is changing with AF European service, but "mini" is simply a new fare which allows people to get a cheaper ticket by sacrificing some of AF's standard benefits. To use another gallicism, there is an idea that 'circulez il n'y a rien a voir' in terms of the meaning of mini in terms of service. "Classic" would remain the AF standard and you could now get a new cheaper offer called "mini" (that is, an extra choice which can compete with low cost fares) if you want.

The sceptic narrative, of which I am afraid I am a supporter is that: considering that the plan is to generalise the "mini" product to AF's entire European network, AF's new standard European offer is becoming low cost (better in some ways: you still get a drink and a snack, worse in other ways: tickets cannot be changed at all unlike all fares on pretty much all low cost airlines including Easyjet, Air Berlin, Norwegian, Vueling, and even Ryanair...) at globally stable fares. "Classic" is only a way for the airline to sell passengers a 'package deal' if they want to buy back what has been taken out from the full service offer for a fixed price of €20 per passenger each way. Under this narrative, "mini" is not a new fare but the new entry service concept for AF.

The whole reputational gamble of AF is that passengers will accept their narrative (our standard is full service but we'll give you a discount of €20 each way if you do not want some aspects of the service such as checked luggage, miles, and seat selection) and if most do, the reputational loss should be limited and indeed, mini would deserve neither much interest nor much criticism (let me rephrase that: much interest if anybody is ready to argue that the Mini fares are effectively €20 cheaper each way than AF's former fares but not even AF is making this argument. All their argument is about the mini fares being €20 cheaper than the classic fares and they virtuously refer from making any reference to any price difference with AF's former fares). If the AF spin is not the narrative most people espouse, however, but instead, many people see AF as an airline "where you now need to pay if you want to check in your bag just like Easyjet, you can't change your seat and you can't change your ticket, and you are not even getting miles any more", then the image of the airline will change quite profoundly. My guess is that Hop! is more likely to take things further in that gloomy direction but of course we don't know for sure yet what the new Hop! offer will consist of.

I think that at this stage, it is far too early to know what narrative will dominate in people's minds. I'm perfectly happy to accept that the narrative I personally associate with 'mini' might not end up being the way most passengers see things in a year or two. However, I think it is essential to also say that similarly, the narrative that AF is trying to promote is not at all guaranteed to be followed either. It is just something that they hope for and too early to say either way right now, although FT being FT, we are all - very legitimately I think - trying to guess one way or another.

JOUY31

That's a pretty well balanced summary, as was San Gottardo's earlier one. My thanks to both of you

psollitt

Another quick point, does this mean that AF will have to install payment machines for card payments on all these hop flights or will the poor passengers not have the option to buy food drink on mini fares.. If so this will cost AF in infrastructure, also the additional confusion of the flight crew if people change seats etc etc, I wonder what the cabin crew unions will make of this as do doubt this will add to their work loads on flights ... you cannot mix a full service and BOB service without causing chaos ..

JOUY31

Err, inflight service will be the same, whether you have purchased a mini-fare or a classic fare.

For the new regional brand, we should learn more tomorrow.

psollitt

my bad... i better not give them any ideas ...

San Gottardo

Indeed all passengers, MINI and others, will receive the same catering and onboard service.

However, whilst AF is wise enough not to start the operational nightmare to sell food to some and serve it for free to others I wonder whether they won't solve the problem in another way: decrease the quality and quantity of catering (is there still room?). I have lost hope into AF catering since the promised significant improvement of catering in European premium classes was a move from the dreaded white box to: the same thing, but just without the lid of the box/a larger tray.

Since they have to address all levers to bring costs in line with their fare structure they might also address this element.

petitaix

+1
I now pay the same (or more) for my MRS-ORY with less service and no miles.