Last week British Airways (BA) announced the introduction of cheaper fares on certain long haul routes to hoover up passengers searching for a good deal – it will be certainly interesting to see how many cost conscious passengers now decide to purchase a ‘Basic’ fare instead of its ‘Standard’ fare (in the economy cabin – World Traveller). Such a bold move would have been unheard of only a few years ago but it is now BA’s direct response to the growing and increasing threat from low cost competition across the world and is a major strategy shift for the traditionally conservative British Airways.
With no free check in bag allowance and no pre allocated seats the new ‘Basic’ fare will certainly appeal to passengers increasingly choosing to fly with other low cost airlines such as Norwegian to the US from London Gatwick. It’s a bold move by BA but who can blame them – I agree with BA’s CE Alex Cruz who argues that our ever crowded marketplace airlines need to deliver a wide range of products at a competitive price to retain custom – with more low cost competition in the skies than ever before BA has finally woken up and is reaching for the skies with its own low alternative. I am convinced it will be a great success.
With one way long haul ‘Basic’ fares starting at £143 (to Dubai) and across 10 long haul routes to the US, Caribbean and Far East – there are savings of up to £60 if you only travel with hand luggage (you can still carry 2 pieces however). I am sure this will be too much of a saving to ignore for younger or older cost conscious flyers – customers that BA has not befriended over recent years. Theses customers are also not bothered which section of the economy cabin they fly in especially if they can save upto £40 by not prebooking their seat. It will however be interesting to see if the ‘Basic’ passengers are allocated seats to the rear of the aircraft.
Given the cost cutting choices to deliver even greater value for money, dare I ask how much longer will it be before BA start charging or (should I say) not providing in flight meals to long haul ‘Basic’ passengers – my view is that with the recent meal enhancements in the World Traveller section, BA’s in flight service costs will start to rack up and it may well be that Alex Cruz will decide to pocket those savings too. Other low cost transatlantic carriers charge passengers for meals – so why don’t BA go the whole way and that way shave even more money off the Basic fare? A further saving of upto £10 per person per sector could be delivered.
In essence with the launch of ‘Basic’ fares BA are becoming an airline for every type of customer and are now providing a differentiated product with a wide variety of service levels to choose from. Whether it’s First Class, Club World, World Traveller Plus, World Traveller (Standard or Basic) BA are successfully delivering a range of fares that appeal to all segments – as they say you pay the money and take your choice.
Whether BA can realistically say it’s a “premium airline” anymore is difficult to say and it all comes down to the perceived value of the class of service you book. But as of today BA are ready to claw back some of the lost business at the back of the aircraft from other low cost carriers carriers who have secured a head start. As Adam Daniels BA’s Chief Commercial Officer remarked at the launch “We now have fares to reflect the different needs of our customers.”
So remember if you are flying BA from London to Austin, Boston, Delhi, Denver, Hong Kong, Oakland, Philadelphia, Dominican Republic and Singapore (and of course not forgetting Dubai) check out the new ‘Basic’ fare, it will save you money and also encourage a good number of flyers to once again to consider flying the flag with BA once again. Of course we can be cynical that these lower ‘Basic’ fares are only available on BA routes where there is low cost competition and it will be interesting to see whether this is the start of a genuine roll out of ‘Basic’ fares across their long haul network.
With Virgin introducing its first hand baggage only ticket last month its very clear that competition for the lower priced traveller has only just begun. BA may have woken up late to the opportunity but it’s now at the party. What will be interesting however is too see how many ‘Basic’ fare seats are available on each BA long haul flight before they try to upsell you to a higher fare. The good news is that if you are a long haul traveller that is looking for the best price (not necessarily the lowest) flying with a major and reputable airline you could do no worse than once again consider BA, they may just have the right deal for you !