JohnnyUMF

How else would certain elements drag their wilted, smoke stench infested selves around the world.

Sixth Freedom

This is not correct because BA operate in a world of uncertain information and do not operate one flight in isolation.

Suppose that in any one year a flight has 1,000 empty F seats. BA estimate that if the entry fare is 10% lower at GBP 5k rather than GBP 5.5k they will sell an extra 150 seats.

Expected revenue gain from selling unsold seats: GBP 5.5k x 150 = GBP 825k

However BA also estimate that 2,000 F passengers will pay 10% less.

Expected revenue loss from diluting revenue paid by existing passengers: (GBP 5.5k - GBP 5k) x 2,000 = GBP 1,000k

Expected profitability = 825k - 1000k = -125k

You could say that this is what fare rules are there to protect against. And this is true to some extent. But both passengers willing to fly BA at 10% less and passengers willing to fly BA at current fares may be booking at the same time and it may not be possible to predict exactly which flights they will want to buy tickets for. Accordingly putting in place fare restrictions that are too punitive risks chasing away passengers who would otherwise have travelled.

This works the other way round too. If carried seat factors are very high then BA should probably be making fares more expensive on the flights in question, reducing passengers and hence demand for the CCR.

Hope that makes sense!

-------------------

But...

It is also difficult for BA to predict how many passengers will use the CCR at any one time if fares are optimal.

There must be some % distribution of passengers who do not use the CCR. But once in a while you will see cases at the tails where a high or low % of passengers booked for travel that day use the CCR, and hence the lounge appears busy or empty even though everything else is normal.

HIDDY

No it doesn't actually....but as you're an analyst I'll take your word for it.

Sixth Freedom

Let me make it a bit more simple.

Scenario 1

BA sell tickets to you and Mrs HIDDY for GBP 1,500 each. Together you pay BA GBP 3,000. Nobody else buys a ticket, henkybaby flies the same route on KLM and one seat on the BA plane is unsold.

The lounge feels empty.

Scenario 2

BA have a sale and sell tickets to you and Mrs HIDDY for GBP 900 each. Together you pay BA GBP 1,800.

But henkybaby now buys a ticket because BA's prices are lower than KLM's, also paying GBP 900 for his BA ticket and filling the last seat.

Total revenue to BA = GBP 1,800 from you and Mrs HIDDY + GBP 900 from henkybaby = GBP 2,700.

Meanwhile henkybaby comes in the lounge and all of a sudden it seems crowded.

Summary

In scenario 1 with higher prices and only two passengers BA earned GBP 3,000 revenue from your flight.

In scenario 2 with lower prices and three passengers BA earned GBP 2,700 revenue from your flight.

Clearly scenario 1 is preferable to scenario 2.

If BA is currently in scenario 2 they could theoretically move to scenario 1 by increasing the fares, earning more revenue (preferable for shareholders) and making the lounges feel less busy.

Now, does that make sense?!

Cccharlie

Interesting to see the comment around need to kick out the current outsourcer. One would assume that it is BA who set the budgets for the cost of the CCR and therefore would it not make sense that we should be pushing BA rather than the outsourcer to improve the amount spent on their premium lounge. The food is certainly improved over the last six months, but at it gets busier by the day, what the CCR really needs is many more service staff to cope with the number of us using the lounge. No wonder it is often quicker to go to the FLounge for speed.

HIDDY

Indeed it does but it was you who started it....not me.

Athlete95

I liked the CCR when I went in with corporate-wage-slave a month ago, it felt very very clean and tidy, and definitely a bit odd for a teen like me- felt very exclusive and I felt like most of these people earn in a few days what I earn in a year...

I can see why GF is preferred by some- I know that if I was to spend a long time at LHR, it would be a no-brainer by choosing the CCR but if I was only there for 20 minutes, a quick drink and snack at GF would be my preferred option.

toothy

Interestingly when I was there the other week I was chatting to one of the staff who I know from a previous employment. They were saying that the contract is up for renewal soon - so it is now down to see if BA decide to go for the outsourcer who is cheapest or provides the best service (I get the impression that the current contract is the cheapest).

T

HIDDY

Could be but only BA will know the answer to that.

I've only had one visit to each of the CCR's at T4 and T5 and in my very limited experience T5 blew the T4 CCR out of the water. In fact the T5 F lounge is ten times better than the T4 CCR.

ukgooner

Try the 1st lounge in Munich. Very busy when i was there... and not on top form

adrianjc32

.....

ESpen36

Quite true. And ACTUALLY, to be honest, I find that the catering at the Club lounge upstairs can be even more palatable in some ways, especially in that it has many more individual options--multiple pastas, sauces, salads, etc--so you can mix and match to make any kind of meal you want. By contrast, the Galleries First lounge has a somewhat more limited menu. You know...sometimes I'm not looking to eat a big hunk of meat at 2:30pm. (But a little light pasta dish would be nice, fixed exactly the way I like it!)

JohnnyUMF

I think the takehome points is that the BA lounge offerings can be quite good, its just that for a premier lounge product the CCR falls consistently short, especially with these multiple threads or posts about people walking next door to GF.

corporate-wage-slave

Yes A95 did bring down the average age of the CCR denizens by about 40 years when he walked in! And for the record, before anyone asks, he asked for a diet coke, not some alco-pop.

But he makes a very good point, it's horses for courses. If you got a leisurely few hours, want to loll about with some magazines and have everything brought to you, then CCR is a good place to go. If it's a graze, munch and slurp session, with less stress on relaxing, then Flounge is ideal. And then Galleries Club has its uses too (I suppose). We're lucky to have this amount of choice in T5, I can only think of Hong Kong having this sort of range.

JohnnyUMF

IMHO CX still offers a pretty terrific lounge product with some really terrific food and beverage concepts (I particularly enjoy some of the non alcholic beverages on offer and more health oriented food options). Also, the showers are wonderful and overall seating areas are so varied, and thats just in the business class lounges.