BA

What did we learn from IAG’s 2018 Capital Markets Day?

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Every November, the British Airways parent company, IAG, gives a presentation to the City about the state of the business and its plans for the future.

The 2018 version can be seen here.  You need to click on ‘IAG Presentations’ at the top and then download the very chunky PDF document.

This presentation is normally the source of some good inside information about the future direction of the group.  This year ….. not so much.  There is virtually nothing in the document which is not already in the public domain in terms of product development and the whole tone is less bullish than in previous years.  There was one interesting titbit in the discussion afterwards – that the A350 fleet to be delivered from next year will not have First Class.

IAG Capital Markets Day 2018

The opening slides give an interesting insight into the current state of the European aviation industry and are worth a read for anyone with a general interest in the sector.

Slide 25 shows that, despite the cost reduction claims, unit costs across IAG are higher today than they were in 2015.

Slides 31-33 are an interesting view on how IAG sees brand segmentation and about the different sorts of customer groups it has.  Only 52% of short haul tickets and 30% of long haul tickets are bought primarily on the basis of price – although you may question from that why so many service cuts were made (and reversed) in recent years.  With 31% of long-haul tickets bought primarily on the basis of the ‘brand’, the bad publicity BA has had in recent years must have had a serious impact on the bottom line.

(2018 is the 2nd year running that the ‘Net Promoter Score’ for British Airways has not been published in this presentation.  NPS is the key IAG internal metric used to judge customer satisfaction, and in simple terms is the gap between the % of customers who would recommend you and the % that would not.)

Slide 35 shows British Airways performing badly compared to the market leader in each customer segment. Emirates is preferred to BA for business class travel, both for leisure and work, for example, whilst Ryanair is preferred to BA by people wanting only cheap seats.  More worryingly, easyJet and Lufthansa are preferred to BA by non-Business Class customers who are willing to focus on more than price.

Slide 39 seems to be saying, basically, what we have been saying for years – BA should stop trying to be ‘everything for everyone’, abandon the race to the bottom and give up the segment of the market which competes solely on price.  Other ‘value’ IAG brands – LEVEL, Aer Lingus etc – will pick this business up.

I will skip over the Aer Lingus and Iberia sections, but it would be unfair not to say that IAG has done a fantastic job with both of these airlines since they were acquired.  Iberia, especially, was a total shambles when it joined IAG and is now transformed in virtually every respect – a new fleet, new seats, a new visual identity and new routes.  Both Iberia and Aer Lingus now have superior business class products to British Airways.

IAG Capital Markets Day 2018

Let’s move on to the British Airways section:

Profitability and return on capital invested remain excellent

Slide 107 – Asia-Pacific, Africa and Latin America are focuses for new routes

Slide 110 – despite taking on substantial extra capacity at Gatwick last year via the Monarch slots, BA did not need to cut prices to fill the extra seats

Slide 110 – remaining Gatwick Boeing 777 fleet to be ‘densified’ in World Traveller by the end of 2019 (although World Traveller Plus will be much improved)

Slide 113 is the key one if you are looking for information on the new Club World seat:

The seat will feature a fixed TV screen.  This could imply that BA is going to use the current Iberia seat – which I like, except for the fact that the TV does not fold away and is stuck in front of your face for the entire flight!  We know this because the slide promises ‘gate to gate’ IFE and this would not be possible if the screen popped out like the current one, as it would need to be folded away for take off and landing.

“A larger seat, direct aisle access, greater privacy and increased stowage” could all apply to the current Iberia seat

The first A350 arrives in July 2019 and the new seat will also be added to two Boeing 777 aircraft next year.  There will be 6-8 aircraft in total with the new seat by the end of 2019. The roll-out will accelerate from 2020.

According to reports elsewhere (I was not on the call myself), it was stated verbally that there will not be a First Class cabin on the new A350 fleet.  This means that you are unlikely to see the new Club World seat on the New York route because that historically has First Class – so no A350 – on the Heathrow services.

There is an implication that the size of the economy cabin will be smaller, with bigger cabins elsewhere.  This fits with the earlier slides which implied that British Airways will, in the future, be happy to abandon those customers who buy only on price.

There will be a ‘product upgrade’ to First Class on the existing fleet – not surprising if there will be a much improved Club World seat on the way.  The next slide says that May 2019 will see ‘new food, bedding and amenities’.  There is no sign that there will be a new First Class seat anytime soon.

Food and drink will improved in ‘key’ lounges

There will be (slide 115) ‘increased flexibility for top tier customers’ which implies an end to the ‘computer says No’ approach.  Let’s see if a BA Gold sitting in Club Europe will be allowed to get something from the Euro Traveller food selection though …..

Finally, slide 121 reminds us that British Airways will be 100 years old in 2019 and we can expect some special events to celebrate.

If you’re interested in travel technology, the final section on IAG Digital is worth a look.

Avios is notable by its absence.  There is usually a special chunk in this presentation devoted to it …. but nothing this year.

All in all, if you have a bit of spare time this Saturday then the whole presentation is worth a read.  You will learn some interesting stuff about European aviation and new developments in travel technology even if there isn’t much new to discover about British Airways (and nothing at all about Avios).

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Comments

  1. As you, and many others, including myself have commented Rob, “BA should stop trying to be ‘everything for everyone’, abandon the race to the bottom and give up the segment of the market which competes solely on price.”. Several years ago I commented that BA were the M & S of airlines, for those very reasons (well before they started using M & S food BTW!). IMHO both companies are similar in regard to their markets. However, why it takes these huge corporates so long to see things like this is beyond me! Another reason I enjoy working for myself, thank god!

    • So can we also now hope for the return of the free sandwich and G&T in Euro Traveller in due course given that eliminating this long value by benefit by BA and Iberia customers has not actually made any more money.

      The reason for this is that on the majority of short haul flights hardly any customers actually buy a pay sandwich or drink at the inflated prices charged so hence the vast extra revenue stream that was supposed to open up has simply not materialised. Also any form of pay bar and sandwich service is always horribly and painfully inefficient (taking as long or longer to serve 10 or 15% of customers as it took to previously give everyone a free sandwich, wrap or drink) because of all the nadgey fudging by customers who do still go for the food and drink option over what they should choose and how they can pay for it. Also travelling on a domestic Iberia internal flight two weeks ago they simply couldn’t make my Lloyds Avios Amex card work in their machines at all and I had to switch to the Mastercard, although later travelling MAD to LHR my Lloyds Avios Amex card was accepted as a means of payment. So another downside of trying to charge the customer that is not properly implemented across all IAG operated flights.

      • Shoestring says:

        I doubt if anybody ever thought that eliminating the free food & drink in ET was going to bring in a significant new M&S food revenue stream. Probably just wipe its nose +++ is all they can ever have thought.

        Conversely, what they did know was that it immediately cut the cost of providing the free F&B, so that was a genuinely calculable saving that would go straight to bottom line or help justify lower fares.

        And whilst I championed getting your legally due compo if BA took away (stole) your free F&B on tickets you’d already paid for (before the change came into being) – we got compo x about 30 tickets on appeal – I never for a minute thought that BA was somehow being reckless in a business sense to make that decision.

        Nobody gives the absence of free F&B a second thought these days, well, except to ‘plan your snacks & booze and snack & booze your plan’, I suppose.

      • I didn’t care then and I don’t care now about the free G&T and roll. If I do actually want a drink I just buy one with any card that comes to hand. It probably does mean that I’d have a soft drink over an alcoholic one which is probably no bad thing at 11.30am. Most people simply adjust to minor (yes it was minor) change.

      • Can’t agree with that about the price or service of the pay on board. I flew Malaga to Gatwick on Wednesday and it was both well used, good quality, served by friendly staff and efficient.
        Since half the cabin staff are looking after a very small number of people the two who do the buy on board food have a real challenge.
        I fly Malaga to London 30 times a year on BA, Easyjet and Ryanair.
        BA is way ahead on all counts and particularly for cabin atmosphere.

        • It was Gatwick. Passenger type and expectations on LGW bucket and spade, kiss me quick routes are very much different to LHR FRA for example.

    • M&S clothing, maybe. M&S Simply Food is one of the highest rated consumer propositions out there.

      • Lady London says:

        +1
        M&S food transformed M&S’s fortunes and has probably kept the company going for the last 30 years.
        However their snack/lunchtimes lines in the stores have always been down to the quality of Tesco’s equivalent, or less.
        That’s the bit of M&S that British Airways has put on their aircraft.

        Personally I find it comical how long British Airways are taking to sell the deliver the Buy on Board. On a 4 or 5 hour route like Malaga I am sure they just about manage. Compared to the likes of Ryanair and Easyjet who have it down to a ‘T’… even providing hot bacon sandwiches as well as cold stuff on flights as short as 90 minutes.

      • Lady London says:

        Haven;t done that route for a long while Genghis and on Sleazy that was how long it took. Point is that BA seems to need a longer shorthaul flight to dole out the Buy on Board. Unlike Ryanair and Easyjet who can have the whole cabin of up to 180 people or so done in about 25mins.

        • Last time I ordered a bacon sandwich it was cold but still better than the CE offering

  2. Some interesting bits.

    On the subject of the BA First class seat, I’ve flown 3 First flights in the last 4 weeks, and none of the seats have gone flat. The headrest area always sticks up. The crew have even tried 2 or 3 other empty seats on board for me and they have all had the same problem. So how often is the BA First class seat ever a flat bed?? Club World seems better in this regard

    • Shoestring says:

      Seat not going flat in F = generous compo according to FT – but you do need to claim.

      • Frankie says:

        I got 50,000 avios for mine not going flat in First earlier this year. Had to claim though.

      • Interesting, is that still the case? I got the impression BA had got extremely stingy with compo in all cases recently.

        • No, much improved.

        • Shoestring says:

          yep apparently they currently got some intern in the F/J compo dept with very thick finger 🙂

        • Shoestring says:

          or fat finger, even lol

          thick, fat – I’m neither! lol

        • Well absolutely zero in may case on recent CW flight – reasonably long reply just reflecting back everything, not apologising for anything, just saying they understand how frustrating it must have been, etc. Usual useless rubbish, not impressed at all.

        • Shoestring says:

          Go for HUACA, honest, check out that FT thread on the BA board – there are some very generous recent awards in F/J.

          Pretty much makes you hope something is deficient.

    • There is an electrical adjustment for the headrest – its one of the two switches near the rocker on the 777/747 and 380 – I think they are on the on the 787 too but don’t see first on that too often.If the adjuster is used it doesn’t go flat in bed mode – same for the lumber adjustment you need to use the buttons to roll them back

  3. I never understand the repeated comment re the IFE screen not folding away and being in front of you the “entire flight” being a problem – most business class seats feature this – the beloved QSuite, and QR’s 787/380 version, EK business…EK First for that matter, LX business, LH First…. Basically it’s only BA and VS that do have foldable (small) screens.

  4. So far as the Gate to Gate entertainment on new Iberia IFE equipped systems is concerned this does not exist in practice despite the installation of the flat non foldable screens in the Iberia equivalent of World Traveller Plus.

    I recently travelled from Madrid to LHR on an Iberia A340-600 in Row 11 in the IB equivalent of World Traveller Plus (declassified to Economy on this flight operationally although the seats were probably still allocated to those of us with membership of BA or Iberia loyalty schemes of some kind as the guy sitting next to me was a senior finance bod from Telefonica travelling to London on personal business, so on an Economy ticket) and whilst we had the full IFE system available to us throughout the flight all movies were cut off at least 10 to 15 minutes before landing at LHR.
    Instead the screens switched to some boring video about landing card requirements and the like at Heathrow.

    This happened without any warning with the net effect that I never saw the last 30 minutes or so of The Commuter. I knew the flight was getting towards the end and was planning to hop through any boring bits in the film to reach the final punchline but no without warning viewing was cut off for good just after we had been descending for 5 or 10 minutes. So this gate to gate entertainment malarkey seems to be a pipe dream (requiring the co-operation of the flight crew who can unfortunately still cut the system dead if they feel like it) although departing from Madrid the IFE system did seem to be available the whole time except when they showed us the safety video.

  5. After 35 years of pretty much solid loyalty to BA I genuinely loath the company. Events over the summer were the final straw. The problem is that they dominate Heathrow and the U.K. frequent flyer market and this makes them difficult to avoid. Even if I choose to fly JAL, Finnair, American, Aer lingus or Iberia I am still paying BA.
    I simply don’t believe anymore that anyone flies BA for the brand ( certainly if the have flown anyone else) and it’s more because of a lack of choice. That lack of real competition at LHR results in disproportionately high airfares compared to other major hubs in Europe.
    Virgin gave up competing years ago and so on any LHR long haul route you have BA and one other and often the alternative is so poorly regarded that it can be ignored. LHR LOS for example. On the route and others people buy BA “ as a brand” but in effect it’s because they have no choice. ( point to point basis)
    As a premium leisure passenger I simply never fly BA on point to point from LHR as their fares are ludicrous and service dismal. EX EU they can offer better fares but the service remains crap albeit you are saving a lot of money. For summer 19 BA and oneworld have been abandoned. I have a sub £1000 business class to Asia fare which will give me direct aisle access, a flat bed and access to a lounge. Connecting flights are using Avios on BA.
    It means I lose my gold card and in all likelihood my status with BA but this summer taught me that I don’t count, that I simply cannot count on BA when it really matters and that they are inept , uncaring and dishonest. I might as well fly on anyone and rely on Amex, a brand that I can trust and which has repeatedly delivered when it really mattered.
    So BA can abandon the price sensitive sector but I won’t really care and frankly won’t notice but I don’t believe they can do so from anywhere except LHR. EX EU they will have to compete on price as they do now particularly given the service.
    Everything else is about the future but as far as BA is concerned the future is a far country and a destination they have never ended up serving.

    • So who got custody of the children?

    • Mr Cruz has clearly an awful done an awful lot of damage in a very short time if a formerly hugely loyal customer like you to the BA brand has now been forced to move away from them as a result of shockingly poor quality of service and frequently abysmal value for money under his reign at the company.

      You are quite right that BA’s fare levels booking late out of LHR are often simply obscene and completely unjustified (being about three times what Easyjet would charge for a last minute booking to the same destination) although that is the only time I actually feel good about using Avios as in those situations it is possible to achieve Avios redemption values as high as 10p per Avios point on some European short haul routes.

      • Shoestring says:

        I know the discussion here is often more about LH & I can’t comment on that.

        But as a regular SH (European Traveller) customer on BA, all I can say is that the overall service this year has been very slick. Planes generally full, I don’t think customers can moan about this – but loaded efficiently with always enough overhead luggage space – & going out from LHR on my route they always let you check in your cabin bags if you so wish, free of charge, it obviously helps them but it can be very convenient for the customer as well if you’re going to have to reclaim baggage the other end in any case. Nice clean aircraft these days. Seats fine for a few hours. Toilets good. Brilliant safety record. Good efficiency on my route. Several slots per day. Even had young & pleasant cabin crew last weekend but that was a Qantas lease I think. Cash fares very keen if you buy in advance. They seemed to be OK about selling the M&S food & drink, not running out & getting round to everybody in an hour as far as I could see.

        Summary: BA in Europe has no particular negatives as I see it, I can’t see that other airlines are going to be any better in Economy, not that I’ve used them much recently.

        So is there a massive difference between the competitive offering in SH vs LH?

        • I agree, having done SWISS short-haul in Business last week and a Lufty short-haul in Business earlier in the year, it is hard to get hugely excited about any of it compared to BA – except when you can wangle a flat-bed long-haul plane.

        • Clean aircraft I cannot agree with, on my flight from LHR to SOF with BA in September I was in row 28 as I got up to leave the aircraft I just happened to notice behind my seat and between the toilet wall the floor was horrible like it had not been hoovered down their in a few weeks !

          Secondly in October I flew with Alitalia from FCO to SOF and their cabin looked generally fresh the cabin walls where a nice clean fresh white colour which is not the case for most of BA’s old and grey coloured cabin walls.

        • Lady London says:

          Food used to be a lot better on Swiss though. Is it still?

        • SWISS brekky was OK, yes. Lufty tends to go for the ‘slice of ham, slice of cheese’ approach which I don’t love.

      • Graham Walsh says:

        A colleague booked LHR > BCN return last week for a trip next week. £900 return in economy. I’m looking at booking LHR>JNB for around £450 return. Supply and demand rules the pricing I guess.

        I was on a flight the other week and it seemed that in between seats hadn’t been cleaned this year. It was disgusting.

    • Catalan says:

      Paul, you by your own admission, a ‘leisure business class traveller’ are not the kind of customer that BA (and by default IAG) will miss. A full fare economy or premium economy ticket is of far more value to them than a ‘cheap’ I class or R class fare. So as upset as you may well be with BA and their service just vote with your feet and stop flying them. You’ll be much better for it and you’ll leave more of those discounted Club seats for Avois collectors like me.

    • Where do you fly to that BA is the only option?

      People often say things like this, but if you continue to actively choose them then they’re clearly doing something right!

    • Lady London says:

      It’s not the British Airways brand that passengers who are not price-sensitive are choosing.

      It;s the corporate agreements that BA has that force passengers working for large corporates, to fly British Airways. British Airways has always cared for their corporate customers very well and kept a good hold on them.

      Some large corporates’ travel policies are beginning to relax though, to the extent that if a traveller can prove another airline will be considerably cheaper and still travel in the same class (= arrive in equivalent condition at the business destination for work) then some policies are now allowing travellers to choose that flight. The thing that blocks this can be the deals British Airways also has for corporate travellers with the very few decent large corporate travel agencies – agencies like HRG (Hogg Robinson) CWT etc. can usually beat even promotional fares on other airlines with the deals they have with BA.

      Lastly the foundation of any good corporate deal with an airline is the route deals for the key routes the company’s employees will fly. Again those will generally keep other airlines out. There’s rates for the City/large corporates, and even more amazing rates for things like film industry… these are a closely guarded secret but basically once your company signs up with British Airways everything will work so that it’s hard on several levels for you to choose the many airlines that have nicer aircraft environments and the fewer that have better service.

      • Joseph Heenan says:

        According to the IAG presentation (slide 30), only 11% of IAG revenue comes from corporate deals, so I’m not sure corporate agreements are that common.

        My company doesn’t have any corporate arrangements. We’re based in Glasgow and I very rarely see BA coming out anywhere close to competitive for business tickets on the routes I fly. KLM or Emirates usually beat BA by at least £1,000. I guess the bulk of BA’s revenue must be coming from London based customers who value a direct flight and it’s not worth them competing for connecting passengers from the rest of the UK.

  6. Thomas Howard says:

    Why do IAG continue to rip the Europe and domestic product to pieces under the core BA brand? Why not put shorthaul under BA CityFlyer (like Iberia Express) and lower the expectation?

    • I don’t follow you as surely service standards on BA Cityflyer in the Economy cabin are usually significantly higher than those operated by BA out of LHR and LGW?

      As to Iberia Express having travelled on them quite a bit in the last two or three years I see no observable significant difference with travelling on the main Iberia brand in Economy so I don’t see the point from a customer perspective (of the separate airline brand I mean) but I believe the point is actually that Iberia Express staff get lower wages and have less staff rights than IB Main staff just like the BA Mixed Feets crews. Even the airline magazine on Iberia Express, Ronda, is the same as when travelling with Iberia. Only Vueling represents a genuinely different customer experience to travelling with Iberia Main but Iberia will now cross ticket on to Vueling flights on connecting routes and sell checked baggage on their flights too.

      • Shoestring says:

        Yep that’s one of BA’s biggest issues – long-standing staff – their higher pay & pensions – their work ethic/ enthusiasm & willingness to give great on-board service compared to staff 25-30 years younger etc. No easy answers but yes, they get round it (with the union in particular) in various ways, airline branding & the freedom to recruit new lower-remunerated staff being one answer I guess. Luckily for the loyal older staff, IAG’s financial performance (and no doubt a candid view of the cost of disruption due to strikes) have removed a lot of the pressure in this area for the time being.

      • I thought Iberia Express had less pitch.

        • Roberto says:

          It does.. My wife wont fly them unless she in in extra legroom.. The seats are too close in my mind as they squeeze extra passengers in. The problem is further exaggerated with the amout of cabin baggage the average Spainard brings on board.

        • When I almost missed my Iberia flight, the ticket agent suggested I took my hold luggage (WAY over hand luggage limits) on board with me.

          I thought I was going to have to argue to take it on, but neither security, the gate agents nor the flight attendants batted an eyelid that I was taking it on board! I had a tight connection and the next flight also didn’t even question it.

      • Thomas Howard says:

        Cityflyer was probably a poor choice (I’ve never flown with them), I assumed it was similar to Iberia Express/Qantaslink and functioned as a feeder or regional connection airline. At the moment I think they’re blurring the lines between trying to be premium/”indulgence” on long haul routes and frugal on short haul so creating a sub-brand where expectation might be lower on domestic/euro flights would be beneficial. I’m still not sure what they’re trying to do on Euro Traveller, it feels to me like easyJet product for BA pricing – they either need to go all out budget airline or try and find some middle ground like Westjet where you at least get a free cup of McCoffee and some very basic IFE.

        To me, everything about BA is inconsistent, I don’t know if the plane interior is going to be older than I am, brand new, clean or dirty and I can live with that if Im paying £70 for a flight to Europe but if I’m spending £1500+ long haul I want to know what I’m getting.

        • The whole point is that it isn’t necessarily at the old BA premium price. I’ve gone from almost exclusively flying LCCs within Europe to flying BA at least half the time.

        • Agreed.

        • Thomas Howard says:

          It’s a premium on LCC and the only advantage is you avoid the stag/hen do crowd at Stansted/Luton. Well worth the money to me but many people aren’t such snobs 😉

        • Agreed BAs biggest problem is inconsistency the transatlantic A380 is at least 5 grades above the tatty old 747 I flew back on from Chicago last year. Tiny screen, flaky entertainment, no individual controllable air vent, generally grubby and so noisy. Crew were pretty miserable as well – clearly it had got to them.

        • I’m sure you are right, but not all 747s are the same (and that is a problem). I flew back from JFK in a 747 Super Hi J in May. Nice little cabin of 16 seats. Recently refurbished to A380 standards (seats/TV). Noisier than an A380 but far enough forward in 14A for it not to be a problem. I really enjoyed the flight.

          I understand they are continuing to refurbish the remaining 747s.

        • Lady London says:

          + 1. But the change fees on BA blow the good shorthaul pricing that is often achievable with a bit of planing, out of the water. As the fare cost isn’t low enough to just throw away the ticket, like with Ryanair.

  7. Any rumours/guesses on the routes the new A350 will fly? Leisure routes that aren’t catered for by First already, eg Maldives?

  8. Went searching for A350 BA routes, stumbled on this, Virgin trying not to fall behind, suspect Rob will run it during the week…

    https://simpleflying.com/virgin-atlantics-new-a350-1000s-to-get-brand-new-upper-class-seats/

    • Here’s the thing. I didn’t know this was secret. I’ve known about it for months 🙂 I just assumed that everyone knew there would be a new seat!

    • Memesweeper says:

      Here’s my prediction based on no inside information whatsoever:

      BA will use the Iberia seat.

      Virgin will use the Delta seat.

      • Catalan says:

        I fully agree with you on the BA seat being a derivative of the Iberia seat.

        Virgin may well be similar to the Virgin Australia seat which is very well regarded.

        • Possibly. But the links between Virgin Atlantic and Virgin Australia are tenuous. Virgin Group owns 20% of the former, 8% of the latter. The major shareholders are completely different.

  9. Michael C says:

    Must admit, the LGW-Orlando I did a couple of weeks ago was the best WT+ I’ve ever flown. Massive screen, great space, small cabin and….WT+ toilet, hurrahhhh!

    N Orleans-LHR on the return was a bit more back to normal, though the WT+ cabin was so small that that was also fine.

    N Orleans airport hysterical – more like 1970S Tirana. No lounge at all, but a voucher. Although admittedly this bought a very nice flight of Californian taster wines at the bar!

  10. “Slide 25 shows that, despite the cost reduction claims, unit costs across IAG are higher today than they were in 2015.”

    And why do you think that is? Hint: Look at the price of oil.

  11. William says:

    BA bashing is a popular pastime. However, is there nobody prepaired to listen to the music? I prefer Easyjet because of the sheer simplicity of their operation. Why can’t you check in earlier with BA? Why can’t ordinary mortals purchase a decent seat? Are we the great unwashed of a social class that should be taking the train? What about having boarding cards readily available to print on buying a seat.
    If BA are only looking for non paying passengers who throw the bills to companies for payment good on them. As the survey discloses even they don’t like it.
    BA- listen this time. You have lived on a good but now tarnished reputation too long.
    Only my opinion, but others seem to agree.

    • Agreed, I’ve travelled Easyjet from Gatwick lots recently and with their (small) extra cost up front seats you get to choose a seat, bring on case + small bag, priority boarding. I have lounge access through credit card and the whole experience seems better than BA biz class at less than economy cost.

  12. Colin MacKinnon says:

    BA is shooting itself in the foot with low pricing in economy.

    Looked to book daughter from Glasgow to Denver. BA now has low-cost no food and baggage fares (as does American and Delta). But they are so bad at breaking out what is allowed as hand-baggage, drinks (you can buy food at airport or take sandwiches with you – but funds are more of a hassle when using connecting flights), how much to buy a hold bag is you end up needing to etc etc.

    So BA won’t answer the phone, but Delta did. And so she – actually – ended up paying for “proper” economy with them because they were simply helpful and straightforward with advice and fees (and actually answered the phone!) and she thought: let’s just book now!

    And they waived phone booking fees!

    If they want to be LoCo, look at how Easyjet and Norwegian describe fares and “extras”. They are not having to invent from scratch!

    • Colin MacKinnon says:

      Fluids – not foods!

      • I just looked and it gave me a bullet point list of exactly what’s included when I clicked on each fare… The only confusing bit was it implied food and drinks would be free on the GLA-LON leg when we all know it isn’t any more.

        How exactly did you and your daughter find it so difficult? And how did BA find it so difficult on the phone – it’s pretty simple!

  13. BA related…have taxes/fees/charges been increased for Avios redemptions in recent days?

    I know HKG have been de-restricted on 1st Nov- looks like that has gone from £34 to £100 for one way from HKG-LON.

    But when I looked last Tokyo was £478 return, but now showing £548
    Hong Kong was £464 (I think), now showing £580
    BKK was £568, now £584
    (all in club world)

    BA redemption finder is also showing the ‘old’ figures in most cases- which I guess are cached to save having to grab the fees each time.

    • They have definitely gone up recently and seem to do so every few months. My redemption seats in CW to the Caribbean booked in August cost me just short of £600 pp (plus RFS fees from MAN), and that’s a shorter journey than Tokyo or Bangkok. It makes me wonder if BA is aiming to push the tax element so high that people are going to be put off using their avios.

      • I think this is exactly their thinking 🙁

        • Lewis Taylor says:

          Wasn’t a tax rise on premium cabins in the chancellor’s budget ?

        • Lady London says:

          Surprisingly, not much of a raise.

          The real budget will come after Brexit. Then we’ll know what we’ve got. Hopefully the mariets can correct and then stabilise. It shouldn;t take too long with a bit of luck. And it would be nice if the Pound could find a floor soon after that.

      • However, if you have an F 241 redemption to Asia, then that fee is still not too bad. But yes noticed fees, won’t call them taxes!, are on the way up…

        Back to RFS and Harry back there. Agree, the RFS etc is a great bonus. Like him, flying back and forth to dub at short notice, RFS is a great product. Usually try to get an exit seat on Y tho. Only go CE if no Y available when l need to be there.

    • APD In long haul premium cabins is only going up by £16, from £156 to £172

  14. OT as no bits but IAG related

    If you use “avios + money” for avios redemption flights on the iberia website, it’s cheaper than doing the same thing on the BA site (for economy redemptions at least)

    This lets you effectively buy points for 0.5-0.6p per avios compared to ~0.8p via BA

    Might be useful for those with a handful of those 90k avios remaining but not quite enough for a redemption flight, and for those who would prefer not to have a negative iberia balance after transferring them to BA

    • Shoestring says:

      interesting, I’ll check that out, could be in exactly that position re: some of the 90K IB points remaining

  15. How will the non-First Class A350s compete against rivals who have a decent business class bed/seat ?!

    Please don’t tell me some high paid management with even higher paid consultant analysts thought that selling food on short haul economy would generate a decent profit ?!
    I presumed it was implemented so they needn’t carry so much weight in the food & beverages as they could expect only a 20-30% uptake on a short flight vs 85+% if it’s handed out for free (or included in the price).

    Whoever thought it would be a huge money spinner needs their P45 and a suitably tarnished reputation. Not being able to get a free / included cup of tea (which is a very British thing to do of course) on the supposed UK Flagship carrier is rather pathetic in my view and negative interns of experience, brand & PR.

    With regard to M&S, the food division saved the company from very significant difficulties whilst it’s clothes offering was an utter shambles. Some of their food is rather nice.

    • Maybe this is exceptional, but I’m flying to Tokyo next month in First (redemption), and no other seats in F have been sold on our flight.

      If people aren’t paying to fly in F (and why would you when, on this route, JAL is so much better) then it makes sense to get rid of the cabin and have more, and better, J seats which people do buy.

      I expect they will oversell the cheaper cabins and upgrade people.

      • Shoestring says:

        I never saw the point of First for an airline, I don’t think they make as much money per square metre (over a year) as selling space in Business.

        • Shoestring says:

          And if there’s no First, you’ll just go Business.

        • They don’t, business class is where the money is. However F is aspirational and there are few who would not wish to experience SQ QF LH SR or CX long haul first so it help keep frequent fliers frequent and those who do pay tend to influencers and loyal.

        • What would excite me would be if an airline flying long haul from the UK replaced Economy with Premium Economy, as Singapore have done on the ultra long haul A350.

          They would be able to sell a PE seat with a 38″ seat pitch £78 cheaper than at present; £94 cheaper from April 2019.

          It could work as an option on one flight a day on high frequency routes.

        • Shoestring says:

          Could be the death of First in airlines apart from ME3 then! I certainly wouldn’t miss it.

          OK OK, I never yet flew in First. But I wouldn’t actually choose to use my own money or points to do so, First might be the old ne plus ultra but not for me, I don’t (honestly!) aspire to it. For the cost.

          Yep, I always like[d] Business, always somebody else’s money though on the TATLs back then. Points these days & with our age I could justify given the cost of the points.

        • For my Japan trip, I used an extra 27000 Avios for two of us to travel out in F instead of J.

          As I don’t have status, reserving two seats in J would cost £152. So if you just look at it as a seat reservations fee, I’m getting 0.56p per avios spent, which is far more than I pay for them. Then of course there’s the Concorde Room, the Johnny Walker Blue label and the LPGS champagne. I think we will get our money’s worth!

        • Shoestring says:

          I think I’d do it no qualms for 27000 points 🙂

        • Genghis says:

          @Nick_C judging by your calculations the other day, you pay more than 0.56p for those avios
          https://www.headforpoints.com/2018/10/30/argentina-v-barbarians-marriott-rewards-points/comment-page-1/#comment-297408

        • Lady London says:

          I’m in a similar position to Nick_C. I’ll be forced to take a British Airways flight in First in the next couple of months, and I’m not looking forward to it. I really don’;t have aspirations to fly on any British Airways flight in First.

          Here’s the thing. On this particular trip I’ll be weighed down with a ridiculous amount of stuff to transport. Luggage fees longhaul are about £200 per piece now. Since I let my status with BA lapse I might be unlucky enough to have to pay for two pieces. So £400. Upgrading to First is cheaper. But no I’m not looking forward to it.

      • Same with our F out to HKG and back from KUL, still F seats available in our cabins. Amazing. At least they put them out for extra redemptions now and again…

  16. @Genghis

    Yes, I sometimes pay about a penny per Avios, and I agree that my post the other day was wrong – I paid 1.08 pence each for about 72000 Avios on my Hotel.com booking.

    But my average cost per Avios is 0.22 of a penny, so my forthcoming upgrade to F is costing me less than £60.

    • Shoestring says:

      Boys, boys!

      Forget about it!

      • I had miscalculated my cost per point the other day. Genghis corrected me, and I didn’t see it straight away, but I appreciate the correction. When I get things wrong, I always admit to it. I’ve learned a lot from Rob’s blogs, but I’ve learned just as much from other people and post here. Thanks everyone.

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