Have short haul ticket prices become cheaper after they started charging for food?
Jul 19, 2017, 9:34 am
#1
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Have short haul ticket prices become cheaper after they started charging for food?
Oh and what's up with their proposed plans of removing free food from complimentary airlines?
Last edited by a330boston; Jul 19, 2017 at 9:44 am
Jul 19, 2017, 10:13 am
#6
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Did anybody really believe that they would? The previous catering was "complimentary" and not part of the cost of the ticket, after all.
It's still a game where prices are as low as they need to be when compared to the competition and charging through the nose where they can get away with it.
It's still a game where prices are as low as they need to be when compared to the competition and charging through the nose where they can get away with it.
Jul 19, 2017, 10:13 am
#7
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The problem they've got is that they did it the wrong way round. Fares have been falling (in relative terms) over the past five years reactionary to competition, to the point where they had to say 'oh crap we're making less money, how can we fix it?' If they'd known what was coming they could have done it in a big blow and lowered fares. But the market doesn't work like that... and hindsight is wonderful.
Jul 19, 2017, 10:16 am
#8
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Why would they?
Unfortunately there is a belief that decoupling items formerly packaged together will make things cheaper, as businesses save costs by only providing what customers will pay for.
In reality most markets set price at what the market will bear and cost has little to do with it.
LCCs provide an element of competition, but their decoupling model will ultimately make overall costs higher, once market restrictions are removed.
Bear in mind that sheer competition, together with new carriers without legacy pension deficits, would have brought ticket prices down. The "inspired move" was to get people to pay for an inferior product seemingly as a result of a lower price they would have gotten anyway. The carrier saves the costs, while the passenger pays the price the route will bear.
So what does the OP think is the answer to this question!
Unfortunately there is a belief that decoupling items formerly packaged together will make things cheaper, as businesses save costs by only providing what customers will pay for.
In reality most markets set price at what the market will bear and cost has little to do with it.
LCCs provide an element of competition, but their decoupling model will ultimately make overall costs higher, once market restrictions are removed.
Bear in mind that sheer competition, together with new carriers without legacy pension deficits, would have brought ticket prices down. The "inspired move" was to get people to pay for an inferior product seemingly as a result of a lower price they would have gotten anyway. The carrier saves the costs, while the passenger pays the price the route will bear.
So what does the OP think is the answer to this question!
Jul 19, 2017, 10:20 am
#9
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Except, we know from IAGs financial statements that fares HAVE come down and continue to come down.
It is nonsense to say that you don't see it, because it is impossible to see. On a purely simplistic level, if BA sold 80 seats at £50 / 40 at £30, and moved to 75 at £50 / 45 at £30, that would be a sharp fall in yield with no obvious fare drop. And only 5 people actually benefit. But the fares are down.
I am old enough to remember when the cheapest Y return to Paris was a few hundred pounds, and that was in 1980's money.
It is nonsense to say that you don't see it, because it is impossible to see. On a purely simplistic level, if BA sold 80 seats at £50 / 40 at £30, and moved to 75 at £50 / 45 at £30, that would be a sharp fall in yield with no obvious fare drop. And only 5 people actually benefit. But the fares are down.
I am old enough to remember when the cheapest Y return to Paris was a few hundred pounds, and that was in 1980's money.
Jul 19, 2017, 10:26 am
#10
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Jul 19, 2017, 11:19 am
#12
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Except, we know from IAGs financial statements that fares HAVE come down and continue to come down.
It is nonsense to say that you don't see it, because it is impossible to see. On a purely simplistic level, if BA sold 80 seats at £50 / 40 at £30, and moved to 75 at £50 / 45 at £30, that would be a sharp fall in yield with no obvious fare drop. And only 5 people actually benefit. But the fares are down.
It is nonsense to say that you don't see it, because it is impossible to see. On a purely simplistic level, if BA sold 80 seats at £50 / 40 at £30, and moved to 75 at £50 / 45 at £30, that would be a sharp fall in yield with no obvious fare drop. And only 5 people actually benefit. But the fares are down.
From the profit figures, it actually looks like they could afford to provide free meals in economy and keep fares at current 'low' levels...
Jul 19, 2017, 11:33 am
#13
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I think fares are cheap if you cherry pick. In fact they are so cheap its crazy to think I can fly on BA london to malaga for £39 and get lounge access & extra leg room seats (with my silver status). Now I might be able to shave another £20 of that if I really dig about but the value I believe I gain over and above others makes that idea a non starter..
Of course if I need to fly tomorrow and am booking last minute then I will get my what-not slapped by all the carriers not just Ba. In that instance I would hunt about of course.
However are the prices cheaper today than the day before BOB - I doubt it... Its all about the margin
Of course if I need to fly tomorrow and am booking last minute then I will get my what-not slapped by all the carriers not just Ba. In that instance I would hunt about of course.
However are the prices cheaper today than the day before BOB - I doubt it... Its all about the margin
Jul 19, 2017, 11:40 am
#14
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But, equally, if you can't see it, how to you know it's true ? Just because the board says so, doesn't mean it's true. And BA is still making hundreds of millions in profit, so it's not like any drop in fares (if there has been any real one) is affecting BA's bottom line.
From the profit figures, it actually looks like they could afford to provide free meals in economy and keep fares at current 'low' levels...
From the profit figures, it actually looks like they could afford to provide free meals in economy and keep fares at current 'low' levels...
the limit of it of course is that yield can change when fares do not, i.e., imagine that the average fare of your LHR-GVA was £100 in Y and £200 in C with an average plane value of £14,000 and the following year the average plane value is £12,000. It could be that fares declined, but also that they increased in both Y and C but BA sold more Y and less C, or more connecting and less nonstop, or more in currency x and less in currency y (though airlines normally also give figures ex currency) etc.
so yes, yields are down but the relationship between yields and fares is also complex.
Jul 19, 2017, 11:43 am
#15
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PRASM, PRASM, and PRASM. Published fares stay the same for lengthy periods of time, but BA --- just like all carriers --- pays its RM / IM people a lot of money to adjust the fare buckets to meet demand.
That's proprietarty information and doubtful anyone who hasn't hacked BA's systems has it.
What any one person here has noticed on the flights they happen to take is irrelevant. But, the fact is that unless BA is falsifying its financial reporting, short-haul fares are falling and falling faster than most consumer prices are changing.
Anyone who thinks that BA drops its price when it stops including a bread roll in the price of a ticket and then raises it when it adds coat hangars, doesn't understand pricing.
If indeed many passengers start booking away from BA due to its food service policies, BA will still have cut costs, but will have lost revenue. On the other hand, perhaps food service doesn't affect sales and therefore demand isn't dropping.
Nobody here knows. It's all just background noise on free food.
That's proprietarty information and doubtful anyone who hasn't hacked BA's systems has it.
What any one person here has noticed on the flights they happen to take is irrelevant. But, the fact is that unless BA is falsifying its financial reporting, short-haul fares are falling and falling faster than most consumer prices are changing.
Anyone who thinks that BA drops its price when it stops including a bread roll in the price of a ticket and then raises it when it adds coat hangars, doesn't understand pricing.
If indeed many passengers start booking away from BA due to its food service policies, BA will still have cut costs, but will have lost revenue. On the other hand, perhaps food service doesn't affect sales and therefore demand isn't dropping.
Nobody here knows. It's all just background noise on free food.