“I see the perception of American starting to change,” he says. “Our brand is becoming stronger and stronger because of the new products.” Unlike most carriers, American does
not hedge its fuel buying and Thomas says the drop in oil prices has helped routes and aircraft types that had been marginal in terms of profitability. The fall in costs has also enabled tacti- cal pricing where necessary to stimulate demand on some routes from the UK. “We don’t have one simple strategy,” Thomas adds.
Other carriers will hide behind their fuel hedging when it comes to offering fare discounts. At the start of the year oil was below US$50 a barrel – half the cost
Other carriers will hide behind their fuel hedging when it comes to offering fare discounts
of six months earlier. “It’s a question we have raised with every carrier we have spoken to,” adds FCM’s Egan-Thomas. “They’re saying we’ve hedged and we are at a price where we are not in a position to drop.”
PRODUCT NEWS
THE START OF 2015 HERALDED SOME MAJOR CABIN UPGRADES, the result of the last few years’ planning from carriers generally feeling it is a safer economic environment to invest in and being under pressure to compete. The big story has been premium economy, either as a dedicated cabin with upgraded service or something akin to economy but with more legroom. What will probably grab the headlines, however, is (at time of press) the proposed start of another all-business class flight from London Luton to New York on 24 April. The operator, La Compagnie, has a track record, as it has been flying from Paris Charles de Gaulle to Newark since last summer. La Compagnie will offer 74 flat beds on a Boeing
58 BBT MARCH/APRIL 2015
757, the same aircraft type used by the former airline Eos a decade ago. Eos fitted just 48 flat beds on board, meaning that the latest venture’s fares should be more competitive and, hopefully, more profitable. Meanwhile, established carriers have been busy reshaping their own products. Delta’s shake-up of its fare categories from 1 March will affect economy passengers more than anything – its Basic Economy domestic fare is more restrictive than that offered by budget airlines – but there are some changes that will affect premium travellers. Alterations to international business class are limited to a confusing rebranding of Business Elite to Delta One, particularly so as the First Class name has been
here, and it
There is much smoke and mirrors is not helped by the
relabelling of the fuel surcharge, now termed the ‘carrier imposed charge’, that hides a multitude of fees. “Someone has been very smart in terms of changing the guise,” Egan-Thomas says. A degree of cynicism is clearly present among buyers, including Continental’s Bruss: “Of course, when prices were rising in the past, no airline ever admit- ted to using hedges,” he says. “It will be interesting to see the reaction of those airlines which claim to hedge to locking in the prices and fuel surcharges for the next two to three years – after all, they are hedging against rising prices, aren’t they?”
La Compagnie
retained for the premium cabin on short-haul flights. Delta’s Economy Comfort premium economy seating is now known as Delta Comfort+ and the design and service levels have been changed slightly.
Delta One and Comfort+ seating will appear on flights from New York to San Francisco from spring, part of a general upgrade of cabins by airlines on transcontinental routes.
BUYINGBUSINESSTRAVEL.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128