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British Airways: The world’s favourite low cost carrier
In this week’s Aviation Intelligence Reporter, we talk about the value and importance of interlining to the aviation industry generally and to the legacy airlines in particular. One of the big differences between the legacy carriers and the low cost carriers has been the ability of the legacy carriers to do on-line transfers and to interline. The processes for each are the same.
The system was largely invented to make the entire industry comply with the then BA requirements and its processes. But, since then, BA’s requirements have shifted. Once, the BA short-haul European network was two different streams of gold. It was a very profitable short-haul network and, of course, a great feeder network for its long-haul network. Those days are gone.
IAG, BA’s owner, is building a new network of many parts, of which BA is but one. Their strategy seems to be in all markets. Thus BA’s European short-haul network is now a competitor to the dominant European short-haul networks, the low cost carriers. BA long-haul continues to be a full service carrier. The European feeder network is now provided to its feeder hubs in Madrid and Dublin by Iberia and Aer Lingus. Its new airline, launched this week, Level, is aiming at being a low cost long haul airline. Heathrow, the jewel in the crown, works the UK market.
In other words the BA European network is now a low cost carrier operation and needs to be considered as such. It is no mystery that its new CEO, Alex Cruz, came to BA from another part of the IAG empire, Vueling, its Spanish LCC. It appears that he came with a mandate to cut costs and transform BA short-haul – a market he knows well.
Part of the cost cutting that BA has been driving through is well known – you buy sandwiches on-board now; seating preferences have costs – but some has been less visible. Well, less visible until last weekend of course, when their computer system went down. It is still not clear the extent to which that was due to cost cutting, it is possible that none of it is, but for an airline, the issue is not the system failing, it is the recovery from the failure.
If you have a perfect flight, and nothing, but nothing, goes wrong, your loyalty to the airline does not move. If something does break down, and you can see that the airline and its staff are working hard to get things back, your loyalty goes up considerably. Hence the importance of interlining.
Once, BA would have had agreements for rebookings with other carriers, through the interline arrangements. The staff would have moved heaven and earth to get you away. That was part of why you booked with BA in the first place. Now, they do not. No LCC has these arrangements. So there was no way to shift their passengers.
Why does this matter? The LCCs have spent years conditioning us to know that if things go wrong it can get very bad indeed. We would expect that sort of treatment. BA has spent about 70 years telling us just how very dependable they are. So when an LCC has an issue like this, it merely confirms in the passengers’ minds that the airline is doing what it can to keep costs down. When it happens to BA and then they behave like an LCC, there is a complete cognitive dissonance.
BA has turned itself into an LCC, at least for its European short-haul network. Now, it needs to move its image and advertising to that of the LCCs circa 2010. Ironically, now, of course, the LCCs are telling us what good things they have done to make our trips more comfortable and convenient. That used to be the role of the legacy carriers.
BA has lost a lot of trust by cheapening its product, but not it’s messaging.
