FrancisA

Well done for saying so simply what seems to elude many on here.

Pricing is not cost plus margin, it is what the market will bear. Similarly product is not absolute but the result of market expectations. Hence in Europe same size seats in SH J when North America and Asia would expect premium seats.

What this means is competition, in form of LCCs, helps everyone as they can cut costs by reducing product but maintain price at the new market level.

The other way of saying it is a superior product won't be competitive because the prevailing market rate will make the product unprofitable.

There seems to be a real struggle with these basic concepts at times.

20Rothmans

Sadly not, but it's added a bit of entertainment to see how I can acquire something palatable to drink on the flight from duty free. They are missing a trick by not operating an off-licence in T5.

FlyerTalker39574

It appears the yield management computer has already kicked in some low fares for October, these include LGW-AGP Ł28, LGW-VCE Ł29.

florens

I haven't noticed a price drop on my regular routes. IMO the fares vary a lot from markets obviuously. Low fares as quoted above are certainly nice, whereas you'll never find a Ł28 on BSL-LHR or ZRH-LHR. Whenever I need shorthaul P2P flights from either of those two cities to London, BA is always more expensive than LX or the lowcost carriers, but this has been like that even before BoB.

Worcester

I seem to recall Cruzis actually stating that prices would not come down. I can only find this from a Business Traveller interview

bafan

We all know about these headline, teaser fares. But how many seats are actually available at this price ?

And, are the full fares/late availability fares really much lower than last year ?

BApilotinsider

How can anyone expect to compare this years fares with last year in such a dynamic market. It has nothing to do with a free bag of nuts. The overall economic climate, oil price, currency rates, overflight charges, competition etc etc etc change on a daily basis and will be reflected in the price quoted.

It is impossible to say that prices have or haven't reduced purely due to BoB.

FlyerTalker39574

I've never seen a BA flight from LGW as low as Ł28, it seems the yield management computer has kicked in these lower fares, which may be due to poor bookings as a result of the removal of the previous complimentary refreshments USP.

bafan have a look and see how many of these low fares are available, I'm seeing some over a several days on LGW-VCE in early October.

oldone

Basically, you did not appreciate the free food when it was available, too little, too sweet, too tasteless, too boring, too this and that.
That wasted (on some of you) food was costing Łs and for sure did little in persuading anyone to fly an airline instead of another if the schedule, location and price were not right and competitive.
So now whatever is saved by not providing wasted, unappreciated free food etc is of very limited and probably insignificant relevance in the bigger picture that real life is.

rossmacd

Agree - we'll never see these fares

Although LX being cheaper on P2P bookings begs the question why anyone would choose BA on the ZRH route.

In saying that, I know someone who got a BA LHR-ZRH-LHR for Ł94 return a couple of months ago, which I thought was a very low price.

florens

Indeed! I now mainly use my Avios for shorthaul P2P on those routes + ZRH-LCY from time to time as for me this is the best value. Usually I reduce the Avios amount to a minimum and pay a bit on top in cash, which I find even better. I am simply not going to pay >Ł200 for ZRH-LHR-ZRH.

HIDDY

Now now, let's not bring common sense into the discussion.

IAN-UK

Well, yes - cost+ is an initial approach to sussing out viability and developing a business model, but unless you supply the MOD or NHS, you quickly find that the market determines your price. And you start working in the opposite direction, seeing if you can produce your widget at an appropriate cost.

Our legacy carriers came from a highly price regulated environment. Finding themselves in a free market as far as pricing goes, the only thing they can do is cut costs, or develop USPs and niches where they have market power. That's where brand, Heathrow, business-class, FFP, free G&T (oops!) Etc etc come into play.

BA seems to be aiming at "generic airline" for Y, competing with LCC: but (belatedly) beefing up premium classes - where it plays against other legacy carriers, and some new guys from the ME.

So all that means that the carrier's costs are unlikely to influence prices. An answer that applies elsewhere in this forum to a question about the impact of BA having to swallow credit card charges. No impact - unless they hit on some new scheme: check-in fee for example 😱

Nuster

I disagree respectfully. It is not only possible but indeed certain that prices have not reduced as a result of BoB.BA will attempt to maximize total revenue which is somewhat but largely quite uncorrelated to marginal cost

Raffles

They are not directly linked, but indirectly they will fall because some people will choose to book elsewhere and (all other things being equal) that will cause BA to reduce seat prices to otherwise fill that seat.

I went to a talk at LBS last year given by someone who worked in BA RevMan. It is more complex than you can begin to imagine but it has NOTHING to do with the underlying cost base. Nothing at all.