On 12 February 1898 the Brighton Evening Argus reported the sad demise of Mr Henry Lindfield. Mr Lindfield, aged 42, described as a gentleman, resided at 42 Montpelier Street in Brighton.
He has the unique distinction of being the first ever victim of an electric car accident whilst driving in an Imperial electric carriage. As Mr. Lindfield’s car passed through Croydon, on route to Brighton and descended a steep hill where he lost control, it swerved off the road through a barbed wire fence and crashed into a tree where sadly Mr. Lindfield sustained injuries from which he never recovered.
Exactly 100 years later another momentous occasion in transport history happened when on Friday, 22 May 1998 the very first British Airways “GO” flight took off from Stagnated airport to Rome Ciampino.
The Go airlines project had the full backing of Bob Ayling, then CEO of British Airways, for it was in November 1997 that BA announced under the project name, Operation Blue Sky, it would launch its own low-cost carrier to meet the changing demand for air travel in Europe.
After a brief spell of expansion and establishing a second operational base at Bristol airport, BA announced in November 2000 that it planned to sell Go in order to stem mounting losses and improve profit levels for the group, coupled with the concerns that Go was attracting customers from BA’s main line services.
History now teaches us that this was an ill-conceived idea, Go was sold in June 2001 in the management buyout backed by private equity firm 3i for £100 million. In May 2002 EasyJet announced that it would buy Go for £374 million to expand its own operations and by December of that year Go was fully integrated under the EasyJet banner.
We are all aware that a top brand name is worth considerably more than any multiple of a bottom-line, although the two can very often go hand-in-hand.
British Airways is undoubtedly the Premier brand in the airline industry, it stands head and shoulders above many others, it is renowned for being a full-service airline, its quality of aircraft together with high quality maintenance regime, superb professional cabin crew plus the stiff upper lip sounding vocals of a captain that immediately gives you confidence.
There are also many other non-visible qualities that go to make up this brand such as training, number of hours a plane flies, pilot experience and dedicated crew members passionate about the brand.
So when BA announced inclusive food would no longer be part of your ticket price on their short haul routes of up to 5 hours (unless you’re travelling business class), alarm bells started to ring again.
It has been reported that BA will reduce the legroom by 1 inch on some short haul flights to European cities from next year. The airline is understood to be adding two extra rows to its Airbus A380 and A321 aircraft by cutting the gap between seats to 29 inches (74 cm).
An analysis shows that this move would put BA on a par with EasyJet and Monarch but give passengers marginally less legroom than those flying with Ryanair, Flybe, Norwegian and the Hungarian budget airline whiz air. You don’t have to be a marketing expert to work out what Ryanair would do with that bit of news!
What is actually happening in the airline industry is the legacy carriers such as BA have looked at the yield per seat and profits the no-frills carriers are making and thought we want some of that thank you!
It was Michael O’Leary with his Ryanair business model that pioneered the way of incredibly cheap seat price and charge for everything else. He’s a classic, and expert, business disrupter.
However there are subtle differences between the two business models, the no-frills carriers do not have the huge infrastructure that legacy airlines have inherited over the years. They are also built on modern technology platforms that allow much more flexibility in terms of distribution and how you can charge for different products.
The big legacy airlines have been working to deliver more seamless and complete online capability, they are now on the precipice of a new distribution system, called NDC which stands for “New Distribution Capability” that will revolutionise many aspects of how we purchase travel in the future, and allow airlines to charge extra for just about everything.
It is therefore interesting that today (March 17th) International Consolidated Airlines Group (IAG) owners of British Airways, Iberia, Aer Lingus and Vueling, have announced the launch of another new airline called Level, which will be based in Barcelona, initially flying long haul budget flights to Los Angeles, Oakland, Buenos Aires and Punta Cana in the Dominican Republic from June.
The airline will use Iberia crew and two new air bus A330 planes, fares should start from €99/$149 each way. This will give IAG five different brands to manage and many see this as an attempt to counter the challenge posted by low-cost newcomers such as Norwegian airlines.
Although this looks good news for the traveller it remains to be seen what impact these sorts of initiatives will have on the more established mainstream airline brands such as BA.
I believe history teaches us that before we run headlong towards the golden goose of profit one should pause a moment to reflect and ask, what we can learn from history?
Following Mr Linfield’s unfortunate accident, Imperial Electric Cars ceased to trade having lost the trust of the public – is there a lesson here for BA?
I’m sure we all sincerely hope that Willie Walsh and the amassed brainpower at IAG have looked at this proposition from every angle. Certainly one to watch.
If you’d like to know more, please contact me on John@Uniglobepreferred.co.uk
