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British Airways To Launch New No-Frills Airline  
User currently offlineTeahan From Germany, joined Nov 1999, 5294 posts, RR: 61
Posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2901 times:

Hello,

Here the the key points from an Article. I don't know the exact source of it because it is a copy and past from a copy and paste on PPRUNE:

------------------------------------------------------
BRITISH Airways will tomorrow announce plans to use Gatwick airport as the base to launch a fierce counter attack against the fast growing low-cost airlines.
The move comes just eight months after BA sold Go, the budget carrier it launched in 1997. The initiative will be revealed alongside the announcement of record quarterly losses when BA publishes its third quarter results.

< snip >

BA intends to reveal a series of new short-haul services from Gatwick designed to compete head on with Ryanair, easyJet and Go. The flights will copy the budget airlines' practice of stripping out all non-essential services such as complimentary meals and drinks to slash costs in order to charge fares comparable with established low-cost operators.

Fares are likely to be below £100 and less than half the existing BA prices for a particular destination.

The dramatic initiative is a result of a review of operations at Gatwick, launched as part of BA's wider strategic re-think called Future Size and Shape. This study, covering the whole airline and expected to result in significant job losses, will be revealed at the end of the month but tomorrow will see BA's low-cost fight back launched in full.

< snip >

BA has identified a host of routes which it believes could be more profitable or turned round from losses by moving to a low-cost model. It intends to sell the flights over the telephone and the internet in the fashion pioneered by Ryanair and easyJet.

However, BA does not intend to launch a new brand to differentiate the flights from its full-service operations.

Routes chosen include destinations such as Malaga, Parma, Barcelona and Zurich which would compete directly with the likes of easyJet and Go, which operate mainly out of Luton and Stansted. BA's new low-cost operation will be run alongside full-service short-haul and long-haul flights out of Gatwick.

BA declined to comment yesterday but news of the initiative brought an immediate response from the established low-cost operators. A spokesman for easyJet said: "We will be looking very closely at BA's pricing strategy. If they are pricing below cost then that could be a case of predatory pricing, which is illegal."

< snip >
----------------------------------------------------

Ok, so this is some kind of semi low-cost airline with the same brand and relatively low fares to compete with EasyJet at Gatwick?

As long as it brings fares down, I am not against it.

Jeremiah


Goodbye SR-LX MD-11 / 6th of March 1991 to the 31st of October 2004
22 replies: All unread, jump to last
 
User currently offlineLMML 14/32 From Malta, joined Jan 2001, 2565 posts, RR: 6
Reply 1, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2816 times:

It has been said recently that in the future there will only be a place for two kinds of airlines: Megacarriers and Low cost ones. And now we see it happening already - the big ones are getting bigger and low cost airlines are budding from everywhere.

User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 2, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2809 times:

I would assume that the operation BA is talking about might be similar to Air Canada's discound "brand" Tango. Tango has to my knowledge proven quite successful. There, they use A320's, and soon 737-200's in all economy configuration, and meals and anything else are extra. The fares they charge are extremely low.


"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
User currently offlineIslander From United Kingdom, joined Jun 2001, 173 posts, RR: 0
Reply 3, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2789 times:

Parma or Palma?

User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 4, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2783 times:

That's exactly what BA need - and keeping the BA "brand" is smart to get the consumers thinking that they will get that bit more from them, against the other no-frills operators.

I am surprised however that they are starting up again, as they had a couple of years headstart in Go.

Now any volunteers to start up a "no-frills" airline in Asia with me?? We can take over the ripe Asia-Pacific market!!  Big grin

BW


User currently offlineOdiE From United States of America, joined Jan 2001, 1641 posts, RR: 1
Reply 5, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2769 times:

Bluewhite: Malaysia already has it's first no-frills airline, launched earlier this year. They are serving various points in Malaysia from the old Kuala Lumpur International Airport in Subang (SZB). Currently, they only have 3 B737-300 and they plan to expand to 5 this year and subsequently to 10 aircraft in the near future. Their plan is to serve most of Malaysia's airport (main ones) and if they are successful, they will expand to other airports in the region like Phuket, Bangkok, Jakarta, Medan and Singapore. Air Asia is doing pretty well right now, and most of their seats to East Malaysia, i.e. Kuching and Kota Kinabalu is fully booked for most days in February.

Check out :http://www.airasia.com

Regards.

PS: By the way, do the new BA startup plan to serve Rome as well? I am planning to fly to Rome somewhere in March!


User currently offlineIainhol From , joined Dec 1969, posts, RR:
Reply 6, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2764 times:

They should redo their mainline ops for no frills, then they would be going somewhere.
Iain


User currently offlineCtbarnes From United States of America, joined Mar 2000, 3491 posts, RR: 50
Reply 7, posted (12 years 7 months 2 weeks 4 days 11 hours ago) and read 2758 times:

Will BA ever learn?

Instead of competing with the likes of EasyJet and Ryanair, Go found istelf competing with its parent. Its reliability and good service was pulling passengers away from BA instead of the other low-cost carriers and leaving BA in a further weakened financial position as a result. Correct me if I'm wrong, but isn't that why BA sold off Go in the first place?

Ron Eddington needs to stop playing around and concentrate on his primary business, namely fixing British Airways. He needs to leave distractions such as the virtual merger with AA and building low cost subsidiaries that do little more than further fragment the market alone for now and concentrate on running the the airline.

Charles, SJ



The customer isn't a moron, she is your wife -David Ogilvy
User currently offlineB737-700 From , joined Dec 1969, posts, RR:
Reply 8, posted (12 years 7 months 2 weeks 4 days 10 hours ago) and read 2754 times:


100 Pounds ?
Mhh should be a bit lower as flights to London are usually pretty cheap today. Even on mainline BA.


User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 9, posted (12 years 7 months 2 weeks 4 days 10 hours ago) and read 2726 times:

Odie - There's also going to be Australian Airlines, operating out of Cairns sometime this autumn, I think. They will take over these routes from Qantas, on an experimental basis.

Good luck to them and Air Asia. I do feel a bit sorry for the established carriers and their established cost bases and especially their staff, trying to compete with these "little guys". Don't forget that about half the world's population lies between Pakistan and China - a max of about 3 hours flying time on the no-frills carriers will still be very popular.

BW



User currently offlineDonder10 From Canada, joined Oct 2001, 6660 posts, RR: 21
Reply 10, posted (12 years 7 months 2 weeks 4 days 10 hours ago) and read 2721 times:

Could this be to protect slots at LGW?

User currently offlineIkarus From United Kingdom, joined Jan 2001, 3524 posts, RR: 2
Reply 11, posted (12 years 7 months 2 weeks 4 days 10 hours ago) and read 2709 times:

Idiocy.

Without re-branding, this essentially means you book a BA flight and end up with no-frills service. Not likely to impress customers. BA always tried to brand itself as world class airline. Going no-frills without a differentiated daughter company is insane....

Besides, why do they pick just those routes where there already is low-cost competition? When several no-frills airlines go head-to-head in competition on a route, this usually ends up with suffering for both. BA is heading straight for making even more losses if it tries....

Regards

Ikarus


User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 12, posted (12 years 7 months 2 weeks 4 days 10 hours ago) and read 2702 times:

Well, BA's regional flights (as are most flights of this sort) are pretty no-frills already! Unless you count a glad-wrapped sandwich and a slice of fruit as "full service".

And why not use the BA brand anyway - it's certainly strong enough! It's obviously something their management have thought about, so why not give it a shot.........

BW


User currently offlineTeahan From Germany, joined Nov 1999, 5294 posts, RR: 61
Reply 13, posted (12 years 7 months 2 weeks 4 days 8 hours ago) and read 2672 times:

Bluewhite,

The service you mention is considered full service nowadays compared to other airlines. On KLM you only get peanuts on flights shorter than 1.5 /2 hours. And I won't even start about the "full service" US Airlines.

Jeremiah



Goodbye SR-LX MD-11 / 6th of March 1991 to the 31st of October 2004
User currently offlineCapt.Picard From , joined Dec 1969, posts, RR:
Reply 14, posted (12 years 7 months 2 weeks 4 days 8 hours ago) and read 2666 times:

Ctbarnes & Ikarus.......you should be replacing BA management, because I think you're both totally correct!

BA should not get into the low-cost business, it is not suited to it. It IS suited to providing quality, business-class service to business destinations worldwide-that's why it commands such a loyal following amongst corporate, frequent-flyers.

That's all I'm saying. Let's watch 'em burn their fingers now at Gatwick....

Regards


User currently offlineIainhol From , joined Dec 1969, posts, RR:
Reply 15, posted (12 years 7 months 2 weeks 4 days 7 hours ago) and read 2623 times:

I disagree with Ctbarnes, Ikarus, and Nigel Picard. BA can not compete with the current fares being offered by such carriers as RyanAir, and Easyjet. Peope will be drawn to BA as the fares will be low, and the prestige of flying BA will beat out the competition. Most people are not concerned with the few frills that come with BA right now. If everyone is friendly, the plane is clean, on time, and the fare is low most people will be very content. This will probably be a lot like the JetBlue of Europe; no frills, but very prestigous, and classy!
Iain


User currently offlineLj From Netherlands, joined Nov 1999, 4429 posts, RR: 0
Reply 16, posted (12 years 7 months 2 weeks 4 days 7 hours ago) and read 2604 times:

If BA continues this way I see a very big chance will see the KLM/BA merger very soon. Only then it would be 80% KLM and just 20% BA (thus KLM effectively taking over BA). I'm glad KLM showed the BA mangement the door when they wanted the merger between those two airlines.

BTW I keep on wondering why everybody is mentioning JetBlue as a succes story. Nobody knows their financial position/results as they don't have to disclose anything. You can only guess on the porfitability of JetBlue.

Regards
Laurens


User currently offlineCtbarnes From United States of America, joined Mar 2000, 3491 posts, RR: 50
Reply 17, posted (12 years 7 months 2 weeks 4 days 6 hours ago) and read 2593 times:

Ian:

I think that BA needs to come to the realization that it cannot be all things to all people. Their historical strength has been in catering to the high-end business traveller. They do a good job in that segment, and they should concentrate their efforts in that area, and not try and compete for the bargain basement segment of the market.

The problem as I stated earlier is that if the new entity flies the same routes as its parent, that new airline ends up taking passengers away from the parent, rather than from the other airlines. That was the lesson with GO, and was the problem when airlines such as Continental tried it with its CA-Lite product.

BA's strategy does not have to be world domination. They should stick to what they are good at and rake in the profits by doing so.

Charles, SJ



The customer isn't a moron, she is your wife -David Ogilvy
User currently offlineIainhol From , joined Dec 1969, posts, RR:
Reply 18, posted (12 years 7 months 2 weeks 4 days 6 hours ago) and read 2581 times:

>>Their historical strength has been in catering to the high-end business traveller. They do a good job in that segment, and they should concentrate their efforts in that area, and not try and compete for the bargain basement segment of the market.<<

I think you will find that passengers has changed. On short flights there are very few people prepared to spend the extra money. Most people just want to get from A to B.
Iain


User currently offlineKrags From United States of America, joined Nov 2001, 47 posts, RR: 0
Reply 19, posted (12 years 7 months 2 weeks 4 days 6 hours ago) and read 2569 times:

I think that in the future you may see the major carriers abandoning short haul flying altogether. That is a market best served by the low cost carriers because as someone pointed out earlier, people are not willing to pay high fares for short distance flights any longer. The only way I think you will see major carriers using their own aircraft on flights under, say 350 miles would be if they had a lot of connecting traffic. That is already happening here in the states. Just look at how Delta is using its connection carriers now. Every day they take over more and more of Delta's mainline flying. Thus freeing up the bigger jets to add frequencies from the hubs to bigger cities.

User currently offlineSkymonster From , joined Dec 1969, posts, RR:
Reply 20, posted (12 years 7 months 2 weeks 4 days 6 hours ago) and read 2562 times:

No frills BA... yeh right... They've got about as much an idea and low cost base for no frills as have... Well, I won't mention names, but don't tell me, they're gonna call it "Baby BA" Big grin

S-M


User currently offlineTwaneedsnohelp From , joined Dec 1969, posts, RR:
Reply 21, posted (12 years 7 months 2 weeks 4 days 5 hours ago) and read 2540 times:

this could be a real mess, not unlike Continental Lite.

User currently offlineCtbarnes From United States of America, joined Mar 2000, 3491 posts, RR: 50
Reply 22, posted (12 years 7 months 2 weeks 4 days 5 hours ago) and read 2530 times:

I think you will find that passengers has changed. On short flights there are very few people prepared to spend the extra money. Most people just want to get from A to B.

The thing is though is that BA's European routes are more than just a way to get from the UK to the continent and back. They also serve an important function as feeder routes for their longhaul flights. If the low-cost subsidiary starts pulling passengers away from the regular services, the parent will lose even more money on the route and it will have to be cut, thus depriving BA of important through traffic for their more profitable longhaul routes.

Charles, SJ



The customer isn't a moron, she is your wife -David Ogilvy
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