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Buy on board: Implemented on BA short haul - opinions on the concept

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Old Sep 29, 2016, 2:55 am
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This thread is for opinions on the concept of Buy on Board, concerned with the rights or wrongs of the decision to introduce it.

An information thread exists for your questions, particularly if they are on factual matters, here:
Buy on board: Information guide for BA shorthaul economy services

There is a separate thread for experiences, anecdotes, reactions and related comments, which is to be found here:
Buy on board: Experiences and reactions from BA's shorthaul economy services

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chongcao posted a comparison of other oneworld airlines' BOB prices

Not happy about these changes?
If you have an existing booking, you may be able to complain and get 1000 Avios or cancel for free until 28 days before departure. BA's complaint form.

However, in November 2016, phone calls to BA indicated that "no refunds would be given as food & drinks were complimentary and not part of the T&C."
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Buy on board: Implemented on BA short haul - opinions on the concept

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Old Oct 1, 2016, 10:10 am
  #976  
 
Join Date: May 2010
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Originally Posted by chongcao
Let us use LON-DUB as example for a difference of £47.63

As a Gold member, you get 625 avios, silver 375 avios (cheapest booked in O class)
So let us average it out for the sake of comparison. It means on average silver and gold member would get 500 Avios and 5 TP. But for the sake of comparison, we use Silver as the yardstick.

Since 375 Avios is equal to the BA BOB value of £3.00. For a return it would be £6.00 value of Avios and 10 TP.

So now the price difference is down to £41.63 per return.

To qualify for Silver, you need 600 TPs. Let us not consider any other route but LON - DUB since we are doing the absolute comparison. You need to fly 60 returns on this route in this price to get to Silver. However, since you qualify on the 50th BA flight so that is a minimum of 25 returns to qualify for Silver.

So that you will have to pay over £1190.75 (or, as a silver member, the difference is £1,040.75 after deduct Avios benefits) in price difference in order to get lounge access.

If you are blue card member and bronze card member, the price difference is even much bigger.

Do you really wish to pay £1,040.75 per year to get lounge access just to have a pack of crisps and a glass of water or whatever? You might think it is worth the money at present. But you may want to think twice when BA starts to cut in lounges as the next source of cut.
I think you're stretching the comparables. A common Avios value given here is 1p per Avios, but if you'd like to use BA's values then to purchase 1000 avios would cost over 3p per avios.

As for lounge visits you're using an extreme. However even going with it 25 returns is 50 lounge visits which works out around £20 a pop. Far cheaper than other much worse lounges.
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Old Oct 1, 2016, 10:11 am
  #977  
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Originally Posted by Flexible preferences
BA isn't the loser if you were not a profitable customer though.
BA needs as many as 'unprofitable' customer to make following numbers looking good on its Financial report:
1>, Load Factor
2>, Passenger Numbers
3>, Forward Booking
4>, RPASM

If any of above numbers going down in next quarter's report, Alex Cruz will have lots of questions to answer. However an unprofitable customer he/she is, BA has all the reason to have as many as possible as long as overall it made a profit. Without these 'unprofitable' customers to fill the planes, to cover the fuel costs and to make financial statement look good, BA would have to fire more people, froze management bonus, cancel lots of 'unprofitable' routes, defer aircraft deliveries and reduce route frequencies.

Unprofitable customer matters in airline business.
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Old Oct 1, 2016, 10:13 am
  #978  
 
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Originally Posted by headingwest
BA will always be a loser in my eyes now.
My guess is that you book early and use an OTA to avail yourself of the cheapest possible fares? Nothing wrong with that, good for you ^

However, factor in your First class lounge visits and Avios redemptions and could it be that BA make a loss on your business? If so, maybe they'll be glad to see the back of you? A happy divorce?
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Old Oct 1, 2016, 10:18 am
  #979  
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Originally Posted by chongcao
Let us use LON-DUB as example for a difference of £47.63
But again you are comparing BA's LHR or LCY with the LCC's STN and LGW. BA only codeshare from LGW. Rightly or wrongly the airport makes a significant difference here, opening up differences in onward travel costs and timing options. All three of your examples involve fairly drastic changes in airports, which in my view invalidates the comparison. If you don't believe me, just look at BA's pricing differentials between LHR and LGW for BCN, VIE and FCO.

To save you looking, LGW-BCN's floor price on BA is £40.72, on easyJet it's £39.49, you'll see both airlines have remarkably similar prices on that route.
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Old Oct 1, 2016, 10:19 am
  #980  
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Originally Posted by Flexible preferences
Yes I did. I added valuable context in one area, on a post in an internet forum And?
Apologies if I misread what you intended to write. It sounded to me as an objection to my initial argument. If it was not, i.e. if you agreed with my initial argument, or neither agreed nor disagreed but wanted to make a completely separate point, then that is absolutely fine (not that disagreeing would not be fine either but you know what I mean.. ).
I was fully aware of the factors you mentioned (not least because I am the kind of anally-retentive person that does engage in those kinds of calculations ) but did not mention them because they were not germane to my argument so I was rather surprised to find them in an answer to my post.
But I didn't do that.
Again, apologies if I misread the purpose of your post.
Maybe you underestimate 'Average Joe', whoever the owner of that unfortunate label is
I am sure that you are sophisticated enough to understand that "average Joe" is is a conceptual construct rather a real person and that it does not make much sense to expect the moniker to have an "owner".
As to under-estimating "him", well it depends of the extent to which one thinks that individual purchasing decisions are the result of careful, objective calculations of pros and cons of a particular solution weighing in all relevant factors and excluding all irrelevant ones or whether things like brand image have a significant impact on them.

The amount of energy and expense that many companies take in projecting, nurturing and protecting a brand, as well as the existence of price differentials which are difficult to explain by purely objective differences of quality, suggest to me that brand image does have a significant impact on purchasing decisions. But you are correct that I may be completely wrong in that and that brand image has little impact on the purchase of airline tickets. If that was the original point you wanted to make, and I must confess that it was not obvious to me, then fair enough and we can, at least for now, agree to disagree on this.
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Old Oct 1, 2016, 10:19 am
  #981  
 
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Originally Posted by Flexible preferences
My guess is that you book early and use an OTA to avail yourself of the cheapest possible fares? Nothing wrong with that, good for you ^

However, factor in your First class lounge visits and Avios redemptions and could it be that BA make a loss on your business? If so, maybe they'll be glad to see the back of you? A happy divorce?
Well judging by my long stay in the BA lounge at TXL yesterday on an AB ticket (let's just say the bubbly and coronation chicken sandwiches took a hammering! ), it's fair to say that BA definitely makes no profit with me, so no doubt they'd be most glad to see the back of me....a happy divorce I'm not sure, but definitely mutual feelings.

I've still got 2 years of status and a stack of Avios, so there's still plenty of time to milk the cow. By then I suspect BA will be desperate for customers if they keep going at the current rate. And considering my experience with customer services today the transformation to low-cost carrier is almost complete!

Last edited by headingwest; Oct 1, 2016 at 10:27 am
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Old Oct 1, 2016, 10:38 am
  #982  
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Originally Posted by corporate-wage-slave
But again you are comparing BA's LHR or LCY with the LCC's STN and LGW. BA only codeshare from LGW. Rightly or wrongly the airport makes a significant difference here, opening up differences in onward travel costs and timing options. All three of your examples involve fairly drastic changes in airports, which in my view invalidates the comparison. If you don't believe me, just look at BA's pricing differentials between LHR and LGW for BCN, VIE and FCO.

To save you looking, LGW-BCN's floor price on BA is £40.72, on easyJet it's £39.49, you'll see both airlines have remarkably similar prices on that route.
Sure. There is a difference between LHR and LGW. A non-negligible proportion of passengers on LHR services will be transferring so you need fewer point-to-point passengers at LHR than you do at LGW, and, among point-to-point passengers, the more corporate-oriented mix, which is less price sensitive, allows BA to charge higher fares. But does that mean that BA can do completely without price-sensitive passengers at LHR and can afford to be complacent towards that constituency? If they can do what they want at LHR with zero impact on demand, why don't they raise fares even more?

Am I part of a minuscule minority who will also consider flying Easyjet and Ryanair out of LGW or STN (even with a BAEC Gold card) on routes where BA operates out of LHR rather than always flying with BA?
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Old Oct 1, 2016, 10:54 am
  #983  
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Originally Posted by NickB
s. But does that mean that BA can do completely without price-sensitive passengers at LHR and can afford to be complacent towards that constituency? If they can do what they want at LHR with zero impact on demand, why don't they raise fares even more?
No BA clearly is price-sensitive: the evidence we have on the EDI, GLA, BCN, VIE, AMS and FCO fares is that BA internally price that difference between LGW and LHR at about £30 to £40 each way. So that seems to be the breakpoint overall (MAD is a seemingly higher figure for obvious reasons). Now your personal figure may well be much lower, but that's what the numbers show us, and what it means that your MRS route difference (BA £100 for LHR, U2 £60 for LGW, return) may well work for you, however BA would be relaxed overall since it's not business they would want now, and will not want post the catering changes.
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Old Oct 1, 2016, 10:58 am
  #984  
 
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Originally Posted by chongcao
Among all oneworld Airlines, the current short haul arrangement is as below:

The Worst:

IBERIA
Water: €2.00 (330ml/Unite Price €0.61 per 100ml)
Coke: €2.50 (330ml/Unite Price: €0.76 per 100ml)
Coffee/Tea: €2.50
Beer: €3.50 (330ml/Unit Price: €1.06 per 100ml)
Spirit: €5.50 (50ml/Unit Price: €11.00 per 100ml)
Sandwich: €7.00
Potato Chips/Crisps: €3.50

AIRBERLIN
Water: €3.00 (500ml/Unite Price €0.60 per 100ml)
Coke: €3.00 (500ml/Unite Price: €0.60 per 100ml)
Coffee/Tea: €2.50
Beer: €3.00 (330ml/Unit Price: €0.91 per 100ml)
Spirit: €4.00 (50ml/Unit Price: €8.00 per 100ml)
Sandwich: €5.00
Potato Chips/Crisps: €2.00 (60g/Unit Price: €3.33 per 100g)

FINNAIR:
Water: FREE
Coke: €3.00 (330ml/Unite Price: €0.91 per 100ml)
Coffee/Tea: FREE
Beer: €5.00 (330ml/Unit Price: €1.52 per 100ml)
Spirit: €6.00 (50ml/Unit Price: €12.00 per 100ml)
Sandwich: €7.00
Potato Chips/Crisps: €3.50
*It is said OWE could have a free drink and snack

AMERICAN
Water: FREE
Coke: FREE
Coffee/Tea: FREE
Beer: $7.00 (€6.20)
Spirit: $7.00 (€6.20 )(50ml/Unit Price: €12.40 per 100ml)
Sandwich: $10.00 (€8.90)
Potato Chips/Crisps: $4.00 (€3.50)
*It is said EXP would have a free drink and snack (not sure about OWE)

BRITISH AIRWAYS
Water: £1.80 (€2.10; 500ml/Unite Price €0.42 per 100ml)
Coke: £1.80 (€2.10; 330ml/Unite Price €0.64 per 100ml)
Coffee/Tea: £2.30 (€2.70)
Beer: £4.00 (€4.60; 330ml/Unit Price: €1.40 per 100ml)
Spirit: £4.50 (€5.20; 50ml/Unit Price: €10.40 per 100ml)
Sandwich: £4.75 (€5.50)
Potato Chips/Crisps: £1.00 (€1.15)

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

The other half:

JAPAN AIRLINES
Free non-alcoholic drinks on Domestic only.

ROYAL JORDANIAN
Free non-alcoholic drinks and FREE snacks.

LATAM:
Free drinks and FREE snacks guaranteed with tiered options, see HERE.

SRI LANKAN:
From Snacks to meals and drinks

CATHAY PACIFIC/QATAR/QANTAS
FREE food and beverage including snacks in some short haul flight

MALAYSIA:
Unsure about domestic arrangement but regional served full food and beverage items.

I certainly know which airline to travel next time!
An impressive summary. Short-haul on Malaysian you have the choice of coffee, tea, fruit juice, water, and a snack. All free.

But the comparison between BA and AA is a bit unfair. Note that with AA, the mixer is free (and the spirit too, if you're OWE).
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Old Oct 1, 2016, 11:03 am
  #985  
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Originally Posted by corporate-wage-slave
No BA clearly is price-sensitive: the evidence we have on the EDI, GLA, BCN, VIE, AMS and FCO fares is that BA internally price that difference between LGW and LHR at about £30 to £40 each way. So that seems to be the breakpoint overall (MAD is a seemingly higher figure for obvious reasons). Now your personal figure may well be much lower, but that's what the numbers show us, and what it means that your MRS route difference (BA £100 for LHR, U2 £60 for LGW, return) may well work for you, however BA would be relaxed overall since it's not business they would want now, and will not want post the catering changes.
Thanks, CWS. Your post confirms that there is competition between LHR and other airports, even if LHR gives one a signifcant advantage. The issue, though, is whether that fraction of the business that currently is happy to pay £100 at LHR rather than £60 at LGW will remain the same after the catering changes. My suspicion is that, while I do not expect loads to fall through the floor, I would expect that there will be fewer and fewer over time as the "premium brand" image fades.
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Old Oct 1, 2016, 11:05 am
  #986  
 
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Another point about AA is that if there's a long delay they dish out the BoB food and alcoholic items for free! I'm not 100% sure this is AA policy but it's happened on 2 of my flights.

Fat chance of this BA management ever dishing out the sarnies when there's a delay, they'll be certain to try and squeeze as much cash out of the passengers.
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Old Oct 1, 2016, 11:23 am
  #987  
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Originally Posted by corporate-wage-slave
But again you are comparing BA's LHR or LCY with the LCC's STN and LGW. BA only codeshare from LGW. Rightly or wrongly the airport makes a significant difference here, opening up differences in onward travel costs and timing options. All three of your examples involve fairly drastic changes in airports, which in my view invalidates the comparison. If you don't believe me, just look at BA's pricing differentials between LHR and LGW for BCN, VIE and FCO.

To save you looking, LGW-BCN's floor price on BA is £40.72, on easyJet it's £39.49, you'll see both airlines have remarkably similar prices on that route.
You are absolutely right! However, my concern is if BA is to compete with LCC as Alex Cruz used as an excuse, I have two concerns:
1>, BA can not compete with LCC on price system wise. This is partly due to high Heathrow surcharges and £5 per ticket credit card fees as illustrated in my examples. So it is pointless to compete for the sake of competing. BA has the option to do BOB only in Gatwick and Stansted but they opted for all short haul network. This will have an impact on point to point traffic and in the long run impact on network traffic.
2>, If BA is to compete with LCC, then the airport does not matter. For someone live in London, there are cheap options to all London airports (for example, the £1 easy bus transfer to Gatwick, the light rail to City and the coach service to Stansted). Thus in this sense, Londoners have options to reach different airports at a low cost and with plenty of options. From this point of view, it does not matter which airport it is when you compare flight price. This is due to:
A>, As I mentioned above, there are cheap ways and convenient ways (non-stop) to every London airport;
B>, Heathrow is not necessarily easy to reach for someone living in Stratford or Croydon or Stanmore.
Thus in comparison, I did not add the fact of reaching airport. Because each individual is different, Heathrow can be a nightmare for someone living in some parts of London. And to most of non-FT passengers, price is the first consideration before airport location.
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Old Oct 1, 2016, 11:35 am
  #988  
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Originally Posted by corporate-wage-slave
No BA clearly is price-sensitive: the evidence we have on the EDI, GLA, BCN, VIE, AMS and FCO fares is that BA internally price that difference between LGW and LHR at about £30 to £40 each way. So that seems to be the breakpoint overall
Your figure (£30-40) definitely matches the experience on my main "multi airports" routes. However, I'm not sure that this is only to do with it being the "comparative value" breaking point. I would expect that the main issue is that on many routes, BA might be also price flights in such a way as to push point to point towards LGW and LCY in order to keep capacity for connecting passengers at LHR. Conversely, connecting passengers are effectively "subsidised" on their short haul routes according to BA's rather notional accounting system, so I imagine that P2P pax have to pay proportionally more to make the flight to make the flight notionally profitable. It is all the more so that LHR has higher costs for BA so that is also probably taken into account in the pricing. Last but not least, on many routes, BA has a monopoly ex-LHR but not ex-LGW so in that sense, even though indeed, the various airports are competing, there are proportionally fewer seats to fill on P2P on each flight and the small number of "captive" LHR audience may be milked a bit more easily thanks to the lower competition from LCC on those short haul routes.
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Old Oct 1, 2016, 11:42 am
  #989  
 
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Originally Posted by 'andad
I heard this. When asked if BA is now a LCC, he (S. Cruz) replied that there are "millions, millions of differences between BA & the airline you mentioned" (that was a ref to EasyJet from the questioner).
Some have questioned this statement, and expressed a desire to know what the millions of differences are. But Cruz is correct - there are millions of differences between BA and the LCCs: millions and millions of Pounds/Euros/Dollars in lower fares.
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Old Oct 1, 2016, 11:47 am
  #990  
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Originally Posted by orbitmic
Your figure (£30-40) definitely matches the experience on my main "multi airports" routes. However, I'm not sure that this is only to do with it being the "comparative value" breaking point. I would expect that the main issue is that on many routes, BA might be also price flights in such a way as to push point to point towards LGW and LCY in order to keep capacity for connecting passengers at LHR. Conversely, connecting passengers are effectively "subsidised" on their short haul routes according to BA's rather notional accounting system, so I imagine that P2P pax have to pay proportionally more to make the flight to make the flight notionally profitable. It is all the more so that LHR has higher costs for BA so that is also probably taken into account in the pricing. Last but not least, on many routes, BA has a monopoly ex-LHR but not ex-LGW so in that sense, even though indeed, the various airports are competing, there are proportionally fewer seats to fill on P2P on each flight and the small number of "captive" LHR audience may be milked a bit more easily thanks to the lower competition from LCC on those short haul routes.
I largely share your analysis but, in a sense, it does not really matter why BA (or other airlines) can charge more at LHR. What matters is that there is a more than negligible number of individuals who regularly fly ex-LHR on BA who will consider flying with another airline from another London airport and the question then arises of the impact of the changes on that particular constituency.
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