BoB - Success, Failure or just head in the clouds?
Sep 2, 2018, 12:06 pm
#106
Join Date: Aug 2015
Posts: 159
Personally, I struggle to understand some of the more histrionic reactions to it... yes, I used to enjoy my free G&T (and still appreciate the freebies ex LCY), but it's not changed my flying behaviour one bit, and if anything I prefer it.
I admit to being in the fortunate position of being a GCH who does about 50:50 LH and SH; LH always in PE or J, SH always in Y (I never have and never would pay for CE). If I'm flying at a time when I'm starving and effectively missing a meal, I appreciate being able to buy a full-sized, edible sandwich, rather than getting one of the miserable mini-wraps they used to give out. I don't mind paying out of pocket, and if I'm on work hours I can reasonably expense it. If I just fancy a drink on an evening flight, I pay for a G&T with Avios and just treat the flight as basically Avios-neutral.
I don't understand SCH and GCH who say they have moved to LCCs because of BoB... Avios and TP-earning aside, I'm still better off with BA; I can use the lounge beforehand, I'm onboard first, and FLY's seat-blocking is a very real benefit. If the BA fare and schedule is competitive (and it usually is), then it will obviously still be my preference.
Has it dented the brand value in my eyes? No - it's just a rational effort at market segmentation in a market where price is the pretty much the sole differentiating factor for the vast majority of leisure travellers...
I admit to being in the fortunate position of being a GCH who does about 50:50 LH and SH; LH always in PE or J, SH always in Y (I never have and never would pay for CE). If I'm flying at a time when I'm starving and effectively missing a meal, I appreciate being able to buy a full-sized, edible sandwich, rather than getting one of the miserable mini-wraps they used to give out. I don't mind paying out of pocket, and if I'm on work hours I can reasonably expense it. If I just fancy a drink on an evening flight, I pay for a G&T with Avios and just treat the flight as basically Avios-neutral.
I don't understand SCH and GCH who say they have moved to LCCs because of BoB... Avios and TP-earning aside, I'm still better off with BA; I can use the lounge beforehand, I'm onboard first, and FLY's seat-blocking is a very real benefit. If the BA fare and schedule is competitive (and it usually is), then it will obviously still be my preference.
Has it dented the brand value in my eyes? No - it's just a rational effort at market segmentation in a market where price is the pretty much the sole differentiating factor for the vast majority of leisure travellers...
Sep 2, 2018, 12:25 pm
#107
Join Date: Sep 2013
Programs: BAEC Gold, EK Skywards (enhanced Blue !), Oman Air Sindbad Gold
Posts: 6,398
- Carriers such as EZY and FR do not make constant claims about being ‘a premium airline’ whilst simultaneously cutting back on services
- BA was highly disingenuous when putting forward its rationale and decision-making behind the introduction of BoB
- BA made claims as to the implied favourable pricing of its menu items which, on closer examination, were shown to be unsubstantiated in many examples
- the time-consuming & horribly-outdated payment logistics used by BA were - understandably - seen as cumbersome at best, and frustrating at worst, by most passengers ; as was the absence of a cash option by some
- it is extremely rare for LCC’s to announce at the start of a flight that there is only “a limited quantity of sandwiches onboard” - a quantity which (as in my own recent experience on a full BA flight) can turn out to be a grand total of two
Sep 2, 2018, 12:28 pm
#108
Join Date: Apr 2008
Location: Bridport, Dorset
Programs: Mucci, BA Bronze, Hilton Gold
Posts: 2,129
Do Eastern still offer free snacks since the tie up with FlyBe? Their fares are still insane.
I agree with the points about how BA announced BoB. I can't see how it was passenger feedback. And running out of food is mad.
I agree with the points about how BA announced BoB. I can't see how it was passenger feedback. And running out of food is mad.
Sep 2, 2018, 1:52 pm
#109
Join Date: Dec 2016
Programs: BAEC GGL/CR; Hilton Diamond; Mucci des Puccis
Posts: 5,602
The evidence is talking to people who fly once or twice a year, i.e. my friends and co-workers. Plus the vast numbers of people who are happy flying LCCs and de facto are not expecting free food and drink. I'm sorry if you don't believe this, but go out and ask if people would prefer a lower fare or a bag of pretzels and a drink and you'll probably be surprised that pretzels score quite low. Interestingly quite a number of people WILL pay quite happily for lounge access pre-flight, which they consider a good start to a holiday.
[that the rise of LCCs is evidence that passengers aren't bothered]
You might, but that would be a bit the same as saying that the rise of premium economy products means that a vast majority of passengers are willing to pay significant extras to have more legroom on long haul flights, or that the fact that all airlines now offer seat selection for a fee meaning that the vast majority of passengers being willing to pay to assign a seat. It's a non sequitur, or what would be known as a problem of ecological fallacy: the fact that there is a model can work within as segmented a market as the airline industry does not in any way mean that a 'vast majority' of the flying public support it.
The rise of the low cost model means that there is a market for people who look for no frills experience at a low cost on their point to point flights (mostly short and to a lower extent long haul) trips, just like there is a market for people willing to pay for extra for a seat in a separate cabin with more legroom, a market for people willing to pay for seat selection, a market for people wanting the opulence of first class travel, and a market for people wanting to fly legacy airlines in economy. None of those things give you much of a sense of proportions. The nearest you'd get to it would be to look at combined passengers numbers, in which case it would seem that at this point in time, a "majority" of economy class passengers actually prefer to fly on legacy carriers compared to low cost ones.
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https://www.ceps.eu/system/files/Low...20together.pdf
" In particular, LCCs increased their market share from 5% in 1998 to 30% in 2008, while the market share of legacy carriers declined from 78% to 60% over the same decade (Reichmuth et al., 2008). The remaining market share was attributed to regional carriers or charters. In fact, as of 2012, the market share of LCCs (44.8%) exceeded that of legacy carriers (42.4%) and this trend seems set to continue (European Commission, 2013): LCCs represented 48% of the seat capacity in 2015 (European Parliament, 2017)."
This is fairly conclusive evidence of not only absolute share but of the trend itself, and given that BA has been running BoB with load factors up, it combines to support my argument that the vast majority of passengers are not bothered about having to pay for food and drink (for whatever reason, whether because they are looking for cheap fares or can expense BoB or are filling up in lounges).
Nobody is questioning that the low cost market exists - indeed, it is strong on short haul point to point flights (though again, ignore my question above of connecting passengers who to my knowledge, happen to make a majority of legacy airlines pax overall).It is also worth remembering that for all of its successes, the low cost model has seen more bankruptcies in the past 10 years than the legacy carrier model, and several remaining contenders are still in dire financial situation. Finally, I understand that analysts are increasingly moving away from the very concept of "low cost" to look at more fluid elements - which is understandable: the FR model is completely different from, say, the EW model.
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This is a red herring. Tech startups fail at an incredible rate. Yet we have Amazon, Google and Facebook. The failure of some companies operating a business model does not mean that that business model cannot win. See above evidence on trends for LCC in Europe which is far more important.
Now, I'd love to know what proportions of p2p and connecting y pax do are indifferent to being offered free F&B or for purchase one, but it is hard to find clear evidence. My questions to you would, be if, as you believe, a "vast majority" of them do not care, what is your theory to explain:
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Well no, it's clear that the extraordinary growth in LCC means that free F&B is not a determining factor, given that they have taken market share from airlines with a traditional model (at a terrifying rate). Of the remaining passengers, a proportion will care about free F&B and a proportion won't.
1) that BA's main competitors (AF, LH, LX, KL, etc) have not followed suit and imitated BA? They would have had plenty of time to do it by now and as I mentioned in an earlier post, airlines did align on things such as HBO fares, paid seat selection in Y, 10 across seating on the 777 etc.
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Air France and KLM are in crisis, and probably don't want to rock the boat. LX is serving quite a niche and well off market segment but is still losing home market share to EasyJet. Lufthansa is the flag carrier for a very conservative country and in their home markets LCCs have had more difficulty penetrating for a number of reasons. Any business may have different strategies to deal with the incursion of low cost carriers. They may decide to hold the line on premium status, but it's standing in the way of a considerable tide. The fact that different legacy carriers have made different decisions has no significance really, any may succeed or fail.
The most worrying thing when you're in a legacy, premium business (as I am) is watching yourself being attacked from underneath by people who don't give a stuff about preserving your business model. That's the situation the legacy carriers are in. Similarly, shareholders are not all that interested in customers' historic emotional attachment to a brand and brand promise, beyond the point where it has value in determining purchasing behaviour. The evidence of the growth of LCCs is that the legacy brand promises are stale. There can be lots of possible reactions to that, we won't find out which is the winning one until the game has advanced.
I've said in the past that it is very difficult to take a premium brand downmarket, because you are by definition not delivering on historic expectations and you disappoint customers (conversely it's very easy to exceed expectations if you're Ryanair, because expectations are very low). You can easily end up caught between two stools, with the classic example being Tesco, not cheap enough to be truly cost competitive, and not premium enough to maintain high profitability. It's clear that BA reputational indicators were down, but at the end of last year I noted that there seemed to be a bit of a charm offensive starting, and this has been quite successful in my view (I've done around 50 BA sectors this year). Cruz has explained that he wanted this year to be one of consolidation, and I'm personally not feeling aggrieved. I think the reputational indicators will go up from where they reached. Anyway the only indicator that really counts is the bottom line, and that seems to be in good shape.
As mentioned before, my guess based on the fact that 1) BA have not cancelled their move to BoB but 2) LH and AF have not chosen to emulate their move and 3) BA yields seem have not improved over the period is that it is probably something of a marginal, but again, that is only a guess.
It's a very interesting strategic battle. I was extremely cynical about BA this time last year, but for a lot of reasons I'm less so now. I don't think this has been a bad year for reputation, they've largely saved themselves from big cock-ups - the weather issues earlier in the year were by and large well dealt with. If I were Cruz I'd be relatively happy.
Sep 2, 2018, 2:08 pm
#110
Join Date: Jan 2016
Location: LHR/ATH
Programs: Amex Platinum, LH SEN (Gold), BA Bronze
Posts: 4,489
The evidence is talking to people who fly once or twice a year, i.e. my friends and co-workers. Plus the vast numbers of people who are happy flying LCCs and de facto are not expecting free food and drink. I'm sorry if you don't believe this, but go out and ask if people would prefer a lower fare or a bag of pretzels and a drink and you'll probably be surprised that pretzels score quite low. Interestingly quite a number of people WILL pay quite happily for lounge access pre-flight, which they consider a good start to a holiday.
https://www.ceps.eu/system/files/Low...20together.pdf
" In particular, LCCs increased their market share from 5% in 1998 to 30% in 2008, while the market share of legacy carriers declined from 78% to 60% over the same decade (Reichmuth et al., 2008). The remaining market share was attributed to regional carriers or charters. In fact, as of 2012, the market share of LCCs (44.8%) exceeded that of legacy carriers (42.4%) and this trend seems set to continue (European Commission, 2013): LCCs represented 48% of the seat capacity in 2015 (European Parliament, 2017)."
This is fairly conclusive evidence of not only absolute share but of the trend itself, and given that BA has been running BoB with load factors up, it combines to support my argument that the vast majority of passengers are not bothered about having to pay for food and drink (for whatever reason, whether because they are looking for cheap fares or can expense BoB or are filling up in lounges).
This is a red herring. Tech startups fail at an incredible rate. Yet we have Amazon, Google and Facebook. The failure of some companies operating a business model does not mean that that business model cannot win. See above evidence on trends for LCC in Europe which is far more important.
Well no, it's clear that the extraordinary growth in LCC means that free F&B is not a determining factor, given that they have taken market share from airlines with a traditional model (at a terrifying rate). Of the remaining passengers, a proportion will care about free F&B and a proportion won't.
Air France and KLM are in crisis, and probably don't want to rock the boat. LX is serving quite a niche and well off market segment but is still losing home market share to EasyJet. Lufthansa is the flag carrier for a very conservative country and in their home markets LCCs have had more difficulty penetrating for a number of reasons. Any business may have different strategies to deal with the incursion of low cost carriers. They may decide to hold the line on premium status, but it's standing in the way of a considerable tide. The fact that different legacy carriers have made different decisions has no significance really, any may succeed or fail.
The most worrying thing when you're in a legacy, premium business (as I am) is watching yourself being attacked from underneath by people who don't give a stuff about preserving your business model. That's the situation the legacy carriers are in. Similarly, shareholders are not all that interested in customers' historic emotional attachment to a brand and brand promise, beyond the point where it has value in determining purchasing behaviour. The evidence of the growth of LCCs is that the legacy brand promises are stale. There can be lots of possible reactions to that, we won't find out which is the winning one until the game has advanced.
I've said in the past that it is very difficult to take a premium brand downmarket, because you are by definition not delivering on historic expectations and you disappoint customers (conversely it's very easy to exceed expectations if you're Ryanair, because expectations are very low). You can easily end up caught between two stools, with the classic example being Tesco, not cheap enough to be truly cost competitive, and not premium enough to maintain high profitability. It's clear that BA reputational indicators were down, but at the end of last year I noted that there seemed to be a bit of a charm offensive starting, and this has been quite successful in my view (I've done around 50 BA sectors this year). Cruz has explained that he wanted this year to be one of consolidation, and I'm personally not feeling aggrieved. I think the reputational indicators will go up from where they reached. Anyway the only indicator that really counts is the bottom line, and that seems to be in good shape.
[COLOR=#333333]
I don't suppose for a minute BoB is a great revenue generator or cost reducer. But it is about brand positioning - instead of the assumption being that BA is a costly product, it is aligned in terms of the overall offer with LCCs. That perception is important for a lot of reasons - in my business, the immediate assumption is that EasyJet is cheaper, even though it mostly isn't when you compare like for like. There was a period where you would get funny sideways glances from the travel bookers for even suggesting BA for short haul. You do need to be in the minds of a purchaser one way or another, and not excluded.
It's a very interesting strategic battle. I was extremely cynical about BA this time last year, but for a lot of reasons I'm less so now. I don't think this has been a bad year for reputation, they've largely saved themselves from big cock-ups - the weather issues earlier in the year were by and large well dealt with. If I were Cruz I'd be relatively happy.
https://www.ceps.eu/system/files/Low...20together.pdf
" In particular, LCCs increased their market share from 5% in 1998 to 30% in 2008, while the market share of legacy carriers declined from 78% to 60% over the same decade (Reichmuth et al., 2008). The remaining market share was attributed to regional carriers or charters. In fact, as of 2012, the market share of LCCs (44.8%) exceeded that of legacy carriers (42.4%) and this trend seems set to continue (European Commission, 2013): LCCs represented 48% of the seat capacity in 2015 (European Parliament, 2017)."
This is fairly conclusive evidence of not only absolute share but of the trend itself, and given that BA has been running BoB with load factors up, it combines to support my argument that the vast majority of passengers are not bothered about having to pay for food and drink (for whatever reason, whether because they are looking for cheap fares or can expense BoB or are filling up in lounges).
This is a red herring. Tech startups fail at an incredible rate. Yet we have Amazon, Google and Facebook. The failure of some companies operating a business model does not mean that that business model cannot win. See above evidence on trends for LCC in Europe which is far more important.
Well no, it's clear that the extraordinary growth in LCC means that free F&B is not a determining factor, given that they have taken market share from airlines with a traditional model (at a terrifying rate). Of the remaining passengers, a proportion will care about free F&B and a proportion won't.
Air France and KLM are in crisis, and probably don't want to rock the boat. LX is serving quite a niche and well off market segment but is still losing home market share to EasyJet. Lufthansa is the flag carrier for a very conservative country and in their home markets LCCs have had more difficulty penetrating for a number of reasons. Any business may have different strategies to deal with the incursion of low cost carriers. They may decide to hold the line on premium status, but it's standing in the way of a considerable tide. The fact that different legacy carriers have made different decisions has no significance really, any may succeed or fail.
The most worrying thing when you're in a legacy, premium business (as I am) is watching yourself being attacked from underneath by people who don't give a stuff about preserving your business model. That's the situation the legacy carriers are in. Similarly, shareholders are not all that interested in customers' historic emotional attachment to a brand and brand promise, beyond the point where it has value in determining purchasing behaviour. The evidence of the growth of LCCs is that the legacy brand promises are stale. There can be lots of possible reactions to that, we won't find out which is the winning one until the game has advanced.
I've said in the past that it is very difficult to take a premium brand downmarket, because you are by definition not delivering on historic expectations and you disappoint customers (conversely it's very easy to exceed expectations if you're Ryanair, because expectations are very low). You can easily end up caught between two stools, with the classic example being Tesco, not cheap enough to be truly cost competitive, and not premium enough to maintain high profitability. It's clear that BA reputational indicators were down, but at the end of last year I noted that there seemed to be a bit of a charm offensive starting, and this has been quite successful in my view (I've done around 50 BA sectors this year). Cruz has explained that he wanted this year to be one of consolidation, and I'm personally not feeling aggrieved. I think the reputational indicators will go up from where they reached. Anyway the only indicator that really counts is the bottom line, and that seems to be in good shape.
[COLOR=#333333]
I don't suppose for a minute BoB is a great revenue generator or cost reducer. But it is about brand positioning - instead of the assumption being that BA is a costly product, it is aligned in terms of the overall offer with LCCs. That perception is important for a lot of reasons - in my business, the immediate assumption is that EasyJet is cheaper, even though it mostly isn't when you compare like for like. There was a period where you would get funny sideways glances from the travel bookers for even suggesting BA for short haul. You do need to be in the minds of a purchaser one way or another, and not excluded.
It's a very interesting strategic battle. I was extremely cynical about BA this time last year, but for a lot of reasons I'm less so now. I don't think this has been a bad year for reputation, they've largely saved themselves from big cock-ups - the weather issues earlier in the year were by and large well dealt with. If I were Cruz I'd be relatively happy.
Sep 2, 2018, 2:14 pm
#111
Join Date: Dec 2016
Programs: BAEC GGL/CR; Hilton Diamond; Mucci des Puccis
Posts: 5,602
Sep 2, 2018, 2:55 pm
#113
Join Date: Feb 2016
Location: LHR
Programs: BAEC Gold, SkyTeam Elite Plus, Sixt Gold
Posts: 418
I personally like BoB. Loved the improved drinks and food is indeed better than what was offered. I would only suggest BA to change the vendor/sys integrator that did built the BoB checkout experience as fab BA crews are always battling with malfunctioning tablets and recepits not printing...
Sep 2, 2018, 3:21 pm
#114
Join Date: Sep 2008
Location: ANR, BELGIUM
Programs: DIAMANTAIRE EXTRAORDINAIRE
Posts: 453
I personally hate the BoB ,
Paid 1500 euros for Bru-lhr-jfk & return on W .
Flight out of Jfk was delayed , had to acutally run to make the connection.Hence could not use the lounge. In addtion to that, boarding for Lhr-Bru delayed.
If I now need water I would have to pay. I have personally chosen to boycott BoB as far as possible.
When I arrived in Bru bought a bottle of water from the super market in the airport.
Bru/Ams -Dxb in W used to be priced 538-580 euros most of the time.
Since may 2018 its priced between 800-1500 euros .
For 1300 -1500 euros I can fly RJ in J class & not worry about getting water or a drink.
If flying ex LHR to point ABC its different , than when flying from Ex -EU to Point ABC .
Paid 1500 euros for Bru-lhr-jfk & return on W .
Flight out of Jfk was delayed , had to acutally run to make the connection.Hence could not use the lounge. In addtion to that, boarding for Lhr-Bru delayed.
If I now need water I would have to pay. I have personally chosen to boycott BoB as far as possible.
When I arrived in Bru bought a bottle of water from the super market in the airport.
Bru/Ams -Dxb in W used to be priced 538-580 euros most of the time.
Since may 2018 its priced between 800-1500 euros .
For 1300 -1500 euros I can fly RJ in J class & not worry about getting water or a drink.
If flying ex LHR to point ABC its different , than when flying from Ex -EU to Point ABC .
Sep 2, 2018, 3:28 pm
#115
Original Poster
Join Date: Jun 2015
Location: LHR, LGW
Programs: BAEC
Posts: 3,421
The evidence is talking to people who fly once or twice a year, i.e. my friends and co-workers. Plus the vast numbers of people who are happy flying LCCs and de facto are not expecting free food and drink. I'm sorry if you don't believe this, but go out and ask if people would prefer a lower fare or a bag of pretzels and a drink and you'll probably be surprised that pretzels score quite low.
Sep 2, 2018, 3:36 pm
#116
FlyerTalk Evangelist
Join Date: Aug 2000
Location: London
Programs: Hilton, IHG - BA, GA, LH, QR, SV, TK
Posts: 17,008
Sep 2, 2018, 3:40 pm
#117
Join Date: Apr 2008
Location: Bridport, Dorset
Programs: Mucci, BA Bronze, Hilton Gold
Posts: 2,129
The number of people I know who can't remember the name of the airline they travelled on, while waxing lyrically about their hotel, just shows to me airlines haven't got past people flying on price.
There is no loyalty as such, even when you have FTers jumping ship for the price of a G&T.
This erosion of inflight services is all due to Internet search engines showing lowest price first, so airlines are cutting back to make sure they are displayed high up on the list. BA advertising the happy lemon, and their charts showing how much more you'd pay with FR and U2 had little impact on people booking by headline price. Something had to give.
There is no loyalty as such, even when you have FTers jumping ship for the price of a G&T.
This erosion of inflight services is all due to Internet search engines showing lowest price first, so airlines are cutting back to make sure they are displayed high up on the list. BA advertising the happy lemon, and their charts showing how much more you'd pay with FR and U2 had little impact on people booking by headline price. Something had to give.
Sep 2, 2018, 3:53 pm
#119
FlyerTalk Evangelist
Join Date: Aug 2002
Location: London
Programs: Mucci. Nothing else matters.
Posts: 38,644
This erosion of inflight services is all due to Internet search engines showing lowest price first, so airlines are cutting back to make sure they are displayed high up on the list. BA advertising the happy lemon, and their charts showing how much more you'd pay with FR and U2 had little impact on people booking by headline price. Something had to give.
I see that I've just passed the 16-year mark here on FT. Every year or so during that period, BA has done something which has had everyone up in arms. Passengers will desert the ship in droves. BA will come to regret it, but by then those who've left will have found out just how green the grass is on the other side of the fence and they'll never come back. BA will sink into a vicious spiral of being able to compete only on price, cutting service and driving even more passengers away, until the entire business collapses.
I'm glad that in the past I've never held my breath waiting for those predictions to come true. Until now, they've always seemed to say more about the people making them than about BA or its business.
But of course, as we are now seeing BA's profits dwindling into nothingness, day by day, before our very eyes ...
Sep 2, 2018, 3:55 pm
#120
Join Date: Dec 2016
Programs: BAEC GGL/CR; Hilton Diamond; Mucci des Puccis
Posts: 5,602
For the majority of fliers, taking a flight is a means to an end: getting to a destination as quickly as practical and as inexpensively as possible. Unless something goes unspeakably badly or very well indeed, the actual flight is forgotten very quickly. No passenger buys a plane ticket for a G&T.
Generally, legacy carriers don't innovate but attempt to maintain their existing model. Ryanair innovated. Before Ryanair (and ignoring the fact that others were doing similar things at the same time for simplicity of argument), everything was bundled. Ryanair aggressively de-bundled every single element of the package - including airport check-in - and thereby dropped headline price to the floor, radically increasing access to aviation. They twigged that if they were able to make the actual customer goal - cheap and efficient travel - easier, they could actually create negatives in customer perception and loyalty and still gain market share. In fact they took a gleeful and I suspect slightly tongue in cheek approach to doing just that., brilliantly parodied by Fascinating Aida in
As a result, for all that is wrong with them in terms of customer experience, they are the biggest carrier by volume in Europe. In your example, the "faster horse" is improvements in the CE menu (for example). The disruptive innovation came from the LCCs.