As Europe’s old guard or legacy airlines struggle to reduce costs to combat the rising tide of low-cost airlines (LCA), these new players are arming themselves with the legacy carriers’ last weapon in their armory – frills.
But different nationalities place different interpretations on what ‘frills’ means. For the British businessman, it is a meal on board, for a German businessman, the ability to pay to jump a queue.
In Europe, there are now 78 airlines of the LCA species, so competition is intense.
British Airways (BA) was forced to shelve internal studies to axe meals and business class (club Europe) on short-haul flights and, in fact, has gone in the opposite direction by trialling a 2-2 configuration from 3-2 in its Club Europe product on its A320 aircraft.
At the other end of the frills scale, BA’s biggest competitor in Europe, Ryanair, now generates up to 16 per cent of its revenue from sources other than the ticket price such as food, drinks and car hire.
While Ryanair relentlessly strips costs out, the smiles are still there and so is the baggage.
The airline constantly tops the European on-time statistics and has fewer lost bags and cancellations.
For many passengers, that is a frill or just a thrill.
In Germany, where LCAs aim to capture significant business share, they are responding to market demands by adding some targeted frills.
Germanwings has blended corporate travellers’ demand for recognition of volume business with online flexibility, including special customer ID log-in to its website for bookings.
More than 40 per cent of German-wings’ passengers are business travellers and the airline has over 500 companies signed up with contracts.
Like Ryanair, it also targets ancillary commission revenue with links to hotel chains and car rentals and promotes special accommodation and car deals. On board, it returns to the strict LCA model, charging for snacks, wine, beer and even coffee.
Air Berlin, Europe’s third largest LCA, offers a comprehensive frequent flyer program with partners such as Hertz, American Express and Radisson.
