Would cheap fares improve BA’s future?

Can British Airways learn something in a recession from the budget airlines? The ding-dong war of words between the budget airlines and the big boys reveals an interesting divergence of views on how to handle a recession in your industry.

For the budget carriers, it’s like Christmas and New Year rolled into one. Ryanair’s full page ads offer 1 million seats at &£9.99, with the banner headline: “Let’s fight back”. EasyJet is close behind with &£20 fares under the line “Let’s get Europe flying again!”, plus a well-worn injunction from retail advertising: “Buy now while stocks last!”

Behind all the posturing lies an important truth about the way airlines market themselves in these troubled times. The evidence of the past couple of weeks seems to show that the smaller, feistier airlines come out fighting, with big, unmissable ads that get straight to the consumer benefit – bargain fares. With a tone of voice that it positive, upbeat and encouraging.

Meanwhile, the larger, higher-cost operators run for cover. BA grounded ten per cent of its services at a stroke. Lufthansa cut a fifth of its transatlantic capacity. KLM is expected to announce further cuts in capacity and jobs and Swissair foundered. On the North Atlantic routes there is no doubt that BA has done a fine job of catering to a business market. It has turned what is a painful experience into something bearable. But something is missing: lower fares.

Where is the spirit of World Offers that BA ran so successfully not so long ago? BA is cutting flights, cutting routes, cutting staff, but fares remain obstinately uncut. In Europe, the budget airlines are demonstrating that tactical price-cutting works. Their supermarket attitude is paying off.

The budget lines have recognised that they can survive if they keep their planes flying – and full. Even if they incur a slight loss. BA and friends could do the same. On selected routes. For a limited period, but (and this is the point) dressed up and promoted louder than anyone has ever seen. Shareholders would like it too. They’ll back a fighting brand with a positive approach to a crisis.

Come on guys! Don’t put your heads in the sand. You have a great proposition to offer – a great network, great staff and great customer service. But you’ve got to grasp the nettle on prices. Not &£9.99, maybe, but big enough to jolt customer perception and get those reservations flowing in. Like &£50 return to anywhere in the world.

John Cristal

Client services director

WFCA Integrated

Tunbridge Wells

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