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Op-Ed: Budget Economy should have been a thing ten years ago

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Op-Ed: Budget Economy should have been a thing ten years ago

Op-Ed: Budget Economy should have been a thing ten years ago
September 13
09:20 2017

LONDON — Almost ten years ago now, a professor of mine said I was “needlessly cruel” when I pitched the idea of a class below economy to him. Not a same seat, worse amenities, basic economy – I meant a true class below where even the seat was different. Not just less pitch, less width.

Well, here we are now. We know that Airbus has been pitching the idea of a 3-5-3 A380 for quite some time, but never really had any takers. Thing is -just the other day Emirates CEO Sir Tim Clark said that he imagined splitting economy up to three, maybe even four entirely separate cabins. Premium, regular, and in his words- budget. I was calling it “voyage” in my whitepapers as I thought it sounded a little more inviting.

The interesting little nugget from Clark with respect to his “budget” seating is that he finds customers care less about pitch than the width. He would probably know given the remarkable amount of ASMs his airline flies – but it does further prove that Emirates is, finally, seriously considering going eleven across.

Clark says that this is a means for Emirates to either retain or recapture “value oriented customers”. Here’s the thing, all customers are value oriented. I am, you are. This is something different.

A good thing.

There was never a need to segment a product based on the same seat, different amenities in either the short or long haul product. What the U.S. carriers have done with Basic Economy is not create a new service – they created a tax where customers have to buy up to regular economy.  United Airlines is losing money on Basic Economy, but they won’t stop. A lot of people have explained why. It’s not actually that interesting, it just further illustrates the ant-mill of American aviation markets.

Of course, they were going to lose money. They want to sell less for more. That’s all Basic Economy is. Pay a “make it less awful fee.”

A true class below, though. Now we’re talking.

Clark was very clear to say that Budget Economy would probably still retain free meals, but on top of a different seat, there would be a charge for the rest of the things associated with flying on a long haul LCC.

He can do this because, again, his budget economy is a new class, perhaps with curtains, separate galleys, and crew. This is not “you are sitting next to someone who paid unrestricted Y and both of you get nothing class.” That Scott Kirby has plagued the US3 with.

I love this. This is the future of air travel. Yes, Clark did spurt the usual platitudes of customers “buying up to normal” but that’s not what this has ever been about with a true Y-. This is about either expanding or inducing demand among lower-wealth travelers and putting a knife in the skull of any advantage a long-haul LCC may be able to offer. Think about it? A lot of the long haul LCCs get terrible press for running their operations on a shoe-string and taking massive delays (and associated EU261 2004 fines). Imagine if your long haul LCC left at the same time as the rest of your airline because it was on the same plane. The real revenue potential, or at least revenue protection, opportunities from a true Y- are amazing.

I’ve been saying this is the answer for ten years- finally, someone listened.

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Bernie Leighton

Bernie Leighton

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