BA Enhances its short haul economy fare structure
Feb 25, 2016, 11:53 am
#92
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Prepare to be surprised. You'll need to pay if you want to change your flight before the day of the departure though.
Feb 25, 2016, 11:59 am
#93
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Feb 25, 2016, 12:03 pm
#94
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Assuming Emerald/Sapphire/Ruby members retain their current free seat selection ability on 'With Checked Baggage' fares, and prices across the three fare types don't change radically, I think this is a positive (aka genuine) enhancement over the current situation.
Feb 25, 2016, 12:21 pm
#95
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This looks like an excuse to hike prices. I can't see the current cheapest with baggage fares being available, given the new semi flex element.
BA turning even more into an LCC for shorthaul point to points by encouraging people to travel HBO?
BA turning even more into an LCC for shorthaul point to points by encouraging people to travel HBO?
Feb 25, 2016, 12:39 pm
#96
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Even if the price is closer to the current semiflex than the standard?
Feb 25, 2016, 12:39 pm
#97
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Since there is so much speculation as to whether changes to make all with-luggage fares flexible will lead to a significant price increase, perhaps some guesswork on why BA might want to do this is called for.
At the moment there are real issues with excess hand luggage (hence yellow tag system) and HBO fares have become the norm for many customers, especially business customers.
Product difference between HBO and other fares was minimal (just a lower price for someone who would not normally have taken checked luggage anyway). Hence problems outlined above.
BA's initial response was to remove seat selection for status passengers (to a great deal of noise and complaint as we all know).
Meanwhile competition is offering more business friendly products like U2's flexi fare with free transfer to an earlier flight.
Against that background BA have adopted a model that looks like FlyBe or EI with a key feature previously conceded to U2.
If BA were now to charge its new semi-flexible with-luggage tickets at the old semi-flexible rates (which could be HBO or not), it would have a real competitive problem. More people would be pushed to HBO fares or, if needing luggage, would be looking elsewhere. The hand luggage problem would get worse.
Alternatively, if BA keep the new semi-flex fares at more or less the old with-luggage levels across all discounted fare buckets, what do they gain? Those complaining that they are not going to pay a with-luggage fare just for free seat selection now find it has another valuable benefit - free same day changes plus fare difference changes in advance. More are likely to opt for this fare and justifying it under corporate travel policies is easier - it's flexible (with luggage) vs inflexible (HBO).
By doing this BA remove a competitive advantage from a rival, address the hand luggage problem, gain some additional revenue and praise from frequent flyers for a genuine enhancement.
[I can't imagine BA moving holiday fares into HBO - even seasoned travellers often take luggage on holiday! That would be a poor commercial judgement and perhaps indicates that the new with-luggage fares are not likely to be exclusively high cost fare buckets.]
That, I would hope, is what is happening here.
If that is correct, two other issues remain. Will TP earning be altered so that HBO fares only earn lowest level of TPs but with-luggage earn standard rate? Will other status benefits such as lounge access be removed from HBO fares?
Perhaps BA is being coy on this because it has not decided to make these changes or perhaps it has not been mentioned them to avoid souring what could be a very positive announcement and this will slip out on a bad news day nearer the time.
Anyway, like so much of this thread, pure (but hopefully reasoned) speculation on my part.
At the moment there are real issues with excess hand luggage (hence yellow tag system) and HBO fares have become the norm for many customers, especially business customers.
Product difference between HBO and other fares was minimal (just a lower price for someone who would not normally have taken checked luggage anyway). Hence problems outlined above.
BA's initial response was to remove seat selection for status passengers (to a great deal of noise and complaint as we all know).
Meanwhile competition is offering more business friendly products like U2's flexi fare with free transfer to an earlier flight.
Against that background BA have adopted a model that looks like FlyBe or EI with a key feature previously conceded to U2.
If BA were now to charge its new semi-flexible with-luggage tickets at the old semi-flexible rates (which could be HBO or not), it would have a real competitive problem. More people would be pushed to HBO fares or, if needing luggage, would be looking elsewhere. The hand luggage problem would get worse.
Alternatively, if BA keep the new semi-flex fares at more or less the old with-luggage levels across all discounted fare buckets, what do they gain? Those complaining that they are not going to pay a with-luggage fare just for free seat selection now find it has another valuable benefit - free same day changes plus fare difference changes in advance. More are likely to opt for this fare and justifying it under corporate travel policies is easier - it's flexible (with luggage) vs inflexible (HBO).
By doing this BA remove a competitive advantage from a rival, address the hand luggage problem, gain some additional revenue and praise from frequent flyers for a genuine enhancement.
[I can't imagine BA moving holiday fares into HBO - even seasoned travellers often take luggage on holiday! That would be a poor commercial judgement and perhaps indicates that the new with-luggage fares are not likely to be exclusively high cost fare buckets.]
That, I would hope, is what is happening here.
If that is correct, two other issues remain. Will TP earning be altered so that HBO fares only earn lowest level of TPs but with-luggage earn standard rate? Will other status benefits such as lounge access be removed from HBO fares?
Perhaps BA is being coy on this because it has not decided to make these changes or perhaps it has not been mentioned them to avoid souring what could be a very positive announcement and this will slip out on a bad news day nearer the time.
Anyway, like so much of this thread, pure (but hopefully reasoned) speculation on my part.
I personally think that BA's policy has nothing to do with a "hand luggage problem". Most flights are actually fine (with the exception of domestics) and if excessive hand luggage was the issue they'd just limit the size of the main piece of luggage like they have for the secondary item. And while indeed U2 attracts increasing numbers of business travellers, it should be noted that while you mention the flexibility to move to an earlier flight, of course, U2 has always allowed passengers on any fare to move their return to an earlier flight for free on a space available basis so while the competitive scene is getting worse and worse, change has been incremental rather than acute.
So an alternative hypothesis is that what BA are trying to do is address a double question which has nothing to do with hand luggage: maximise income while remaining competitive on price at the lowest level by retaining cheap entry fares but milking more cash out of other passengers and this is exactly what this achieves:
- people still attracted by cheap entry fares = same competitiveness;
- more cash milked out of those who end up needing to check a bag by immediately charging twice the fare difference in that case for only one piece of checked luggage (as elite allowance does not apply) = more cash from leisure traveller through ancillary revenue;
- hope that more corporate customers who used to buy the "regular" luggage inclusive fares will be incentivised to pay more for the new more expensive semi flex fare by removing the intermediary luggage inclusive without flexibility level = more cash from corporate travellers;
In other words, that alternative hypothesis suggests that the "old" luggage inclusive fare offered comparatively too good value for money and too few people bought up to the semi flex which has not had the expected success. Therefore, BA are creating an artificial gap between HBO and the new semi-flex in order to push more people into that category while having a chance to extract more money from those who choose not to bite.
Feb 25, 2016, 1:40 pm
#98
Join Date: May 2014
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EI HBO fares currently don't earn their equivalent of avios or tier points in their current Gold Circle scheme.
Feb 25, 2016, 2:05 pm
#99
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Alternative narrative:
I personally think that BA's policy has nothing to do with a "hand luggage problem". Most flights are actually fine (with the exception of domestics) and if excessive hand luggage was the issue they'd just limit the size of the main piece of luggage like they have for the secondary item. And while indeed U2 attracts increasing numbers of business travellers, it should be noted that while you mention the flexibility to move to an earlier flight, of course, U2 has always allowed passengers on any fare to move their return to an earlier flight for free on a space available basis so while the competitive scene is getting worse and worse, change has been incremental rather than acute.
So an alternative hypothesis is that what BA are trying to do is address a double question which has nothing to do with hand luggage: maximise income while remaining competitive on price at the lowest level by retaining cheap entry fares but milking more cash out of other passengers and this is exactly what this achieves:
- people still attracted by cheap entry fares = same competitiveness;
- more cash milked out of those who end up needing to check a bag by immediately charging twice the fare difference in that case for only one piece of checked luggage (as elite allowance does not apply) = more cash from leisure traveller through ancillary revenue;
- hope that more corporate customers who used to buy the "regular" luggage inclusive fares will be incentivised to pay more for the new more expensive semi flex fare by removing the intermediary luggage inclusive without flexibility level = more cash from corporate travellers;
In other words, that alternative hypothesis suggests that the "old" luggage inclusive fare offered comparatively too good value for money and too few people bought up to the semi flex which has not had the expected success. Therefore, BA are creating an artificial gap between HBO and the new semi-flex in order to push more people into that category while having a chance to extract more money from those who choose not to bite.
I personally think that BA's policy has nothing to do with a "hand luggage problem". Most flights are actually fine (with the exception of domestics) and if excessive hand luggage was the issue they'd just limit the size of the main piece of luggage like they have for the secondary item. And while indeed U2 attracts increasing numbers of business travellers, it should be noted that while you mention the flexibility to move to an earlier flight, of course, U2 has always allowed passengers on any fare to move their return to an earlier flight for free on a space available basis so while the competitive scene is getting worse and worse, change has been incremental rather than acute.
So an alternative hypothesis is that what BA are trying to do is address a double question which has nothing to do with hand luggage: maximise income while remaining competitive on price at the lowest level by retaining cheap entry fares but milking more cash out of other passengers and this is exactly what this achieves:
- people still attracted by cheap entry fares = same competitiveness;
- more cash milked out of those who end up needing to check a bag by immediately charging twice the fare difference in that case for only one piece of checked luggage (as elite allowance does not apply) = more cash from leisure traveller through ancillary revenue;
- hope that more corporate customers who used to buy the "regular" luggage inclusive fares will be incentivised to pay more for the new more expensive semi flex fare by removing the intermediary luggage inclusive without flexibility level = more cash from corporate travellers;
In other words, that alternative hypothesis suggests that the "old" luggage inclusive fare offered comparatively too good value for money and too few people bought up to the semi flex which has not had the expected success. Therefore, BA are creating an artificial gap between HBO and the new semi-flex in order to push more people into that category while having a chance to extract more money from those who choose not to bite.
There is a hand baggage problem. It is well documented on here and affects more than just domestic flights - it is after all the reason that BA introduced the yellow tag system.
There is also an HBO problem in that too many customers have opted for HBO as their standard fare to purchase. BA seem to have made a strategic mistake here, believing that HBO would be a private fare in corporate terms but show up to their advantage on comparison sites for price sensitive (mostly leisure passengers). The end result has been lost revenue. This explains why they have chosen to remove seat selection privileges from status passengers and why they are now relegating HBO fares to the category of inflexible fares.
If BA's aim is to "maximise income while remaining competitive on price", the scenario that you paint does not add up.
BA are not reducing the price of HBO fares - the price presumably remains the same, but any flexibility that there was is gone. So no new customers here.
Plenty of leisure passengers want and need luggage and will balk at flying BA if the only luggage inclusive fare they are offered books into B (as is the case with existing ex-LGW semi-flex fares). We may know that with fixed dates CE would be cheaper and that you can (at the moment at least) book HBO and add luggage. Would the average once-a-year leisure passenger? I doubt it.
Corporate passengers may also struggle to justify a B fare booking or the additional costs if they opt for HBO plus luggage fee.
Easyjet do offer change to an earlier flight for your return journey as long as you have already made an outbound flight with them on the same booking.
When you say "too few people bought up to the semi flex which has not had the expected success", I think your analysis is right. BA envisaged this as a way of combating Easyjet's offer, but it simply didn't work. As a result, to remain competitive and to maximise income, BA are now offering this to anyone who books a fare that includes luggage.
I really cannot imagine that BA are trying to force most passengers on to HBO fares (at a lower price than existing Standard fares and hoping for ancillary fees from those who really want luggage) whilst pushing corporate customers into buying expensive semi-flexible fares (which didn't sell well previously) by removing cheaper alternatives. That approach would certainly do something for revenues, but I suspect it would be Easyjet's that would be rising and BA's that would be falling.
We will know the answer to this one when we see which fare buckets are in the new semi-flex category. Until then this is speculation.
Feb 25, 2016, 2:41 pm
#100
Join Date: Jun 2015
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Thanks for posting about this new development...great to know about it and will be interesting to see how it develops...
I do wonder why we haven't heard about this from our BA rep(s) on the board first but I do hope they will at least answer the questions being raised about this change...
I do wonder why we haven't heard about this from our BA rep(s) on the board first but I do hope they will at least answer the questions being raised about this change...
Great idea!
"All posts are my own and not on behalf of my employer"
Feb 25, 2016, 3:35 pm
#101
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The way I read this is that BA are not actually adding anything new, only removing the three below options currently available, namely:
HBO Semi Flex - (£147.93)
HBO Fully Flex - (£299.93)
WCB Standard - (£80.93)
As a result it looks like your options after 08/03 will be (I just did an ABZ-LHR dummy search):
HBO Standard - £70.93
WCB Semi Flex - £157.93
WCB Fully Flex - £309.93
I would expect there'll be no changes made to the actual conditions as these fares can all be chosen at present and I'd be very surprised if the gulf between the HBO Standard and WCB Semi Flex is reduced.
Just yet another decision painted to be of benefit when actually it's very much of detriment to customers. Thank god I use RFS on short haul mostly. Won't be long until that's enhanced to HBO conditions no doubt!
HBO Semi Flex - (£147.93)
HBO Fully Flex - (£299.93)
WCB Standard - (£80.93)
As a result it looks like your options after 08/03 will be (I just did an ABZ-LHR dummy search):
HBO Standard - £70.93
WCB Semi Flex - £157.93
WCB Fully Flex - £309.93
I would expect there'll be no changes made to the actual conditions as these fares can all be chosen at present and I'd be very surprised if the gulf between the HBO Standard and WCB Semi Flex is reduced.
Just yet another decision painted to be of benefit when actually it's very much of detriment to customers. Thank god I use RFS on short haul mostly. Won't be long until that's enhanced to HBO conditions no doubt!
Feb 25, 2016, 3:47 pm
#102
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Come on guys, this isn't 1997, this is BA with WW and Cruz. BA aren't going to Do any genuine enhancements. This is the end of free checked bags, save for the dearest fares. All economy fares, except B and Y class, are becoming HBO. The semi flex will be B class - BA aren't going to just start allowing same day changes on fares that cost £100 return! This is BA. What they will do is make everybody pay for an extra bag. They won't give FF members their free extra allowance unless they book a baggage inclusive (Y or B) fare. Maybe the same with seat selection - so basically a Gold booking a cheapo or even moderately expensive fare will need to pre pay seating, book B or Y, or lump it.
Club Europe is looking increasingly good value.
In other words, BA short haul economy is going LCC. In about 18 months it'll probably all go over to Vueling.
I have a really bad feeling about this.
Club Europe is looking increasingly good value.
In other words, BA short haul economy is going LCC. In about 18 months it'll probably all go over to Vueling.
I have a really bad feeling about this.
Feb 25, 2016, 3:57 pm
#103
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Feb 25, 2016, 4:09 pm
#104
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I'd really prefer if BA adopted the US model - all short haul economy fares are HBO, you pay for seat selection and a bag, you get free seat selection and one bag if you have a status.
Feb 25, 2016, 4:22 pm
#105
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BA Enhances its short haul economy fare structure
There's been a lot of talk about how this compares to LCCs but isn't a limiting factor also what legacy carriers like LH and AF/KL are doing? Their pricing between the HBO equivalent and lowest non-HBO is roughly equivalent to the difference between those fares on BA today. Bearing in mind that those non-HBO fares on the others seem to come already with a greater degree of flexibility than BA's non-HBO on the cheapest buckets.
This presumably helps explain why BA would be rolling this out only in simple itineraries first. They'll hope that the convenience of a nonstop is enough to induce pax to pay more for the mid-tier fares. If so, it'll be interesting to see how right they are about that.
This presumably helps explain why BA would be rolling this out only in simple itineraries first. They'll hope that the convenience of a nonstop is enough to induce pax to pay more for the mid-tier fares. If so, it'll be interesting to see how right they are about that.