It Seems Airlines Believe Loyal Customers Are Unprofitable Customers

As Miles for Blighty reported yesterday, as of March 26th British Airways passengers who purchase ‘Hand Baggage Only’ (HBO) fares will no longer get to select their seat. Instead BA will allocate a seat for them.

Non-BA flyers can probably surmise that HBO fares are British Airways’ cheap tickets. From the British Airways FAQs for HBO fares:

The Hand baggage only fare means our customers bring no hold baggage, but are still able to benefit from our generous hand baggage allowance and take one piece (plus a handbag or laptop bag) on board. … Hand baggage only fares provide an additional lower cost choice for customers who do not wish to take checked baggage.

Even elite status members of the Executive Club program will have their seats allocated if they purchase an HBO fare – loyalty and status be damned.

In addition to Miles for Blighty’s post on the subject, the program change has caused quite a stir on FlyerTalk, where multiple threads have been merged into one giant mega-thread of angst.

Among the many great points being made by frequent British Airways flyers:

My main issue with this is not about losing a privilege on some flights per se. My main issue is that BA is effectively only trying to differentiate between its various fares by making its product less good than it could be even when it does not save it any money. … In other words, this is a mean change because BA are simply making your travel experience worse even when making it better would cost them nothing. ~orbitmic

I continued to take BA because of the benefits like seat allocation. Take those benefits (which we have had for decades) away and BA’s loyalty value is eroded. They increasingly need to win business on price alone … which is no way to run a premium airline. ~SP0

I don’t understand the change at all (as few will pay extra, but it will annoy a lot of card holders), but this just seems bizarre. At least let them pick seats for free at OLCI. It means cheap fares with no status booked with a bag get better seat choice than Gold without a bag, even if the fare class is much higher ~shefgab

Status is too easy to get. You can land Gold by spending not much more than a grand, of which BA see very little. You then rip the backside out of the status benefits. Rather than take an axe to the perks, they would be better off changing the way status is attained. ~Swiss Tony

BA seem to be positioning themselves in what consultants love to call “the mushy middle” I think – neither a LCC or a premium airline. ~Cradders

These quotes only touch on the wide and varied viewpoints being discussed in this lively and very active thread.

But the common theme through it all – and more generally, the theme running through most of the discussions about what increasingly appears to be an industry-wide attack on frequent flyer programs in 2015 – is; have airlines determined once-and-for-all that having loyal customers doesn’t matter to the bottom line?

Have their big-data analytics and revenue numbers proved to them beyond any doubt that it costs more to attract and retain frequent flyers than the revenue generated from same?

And the big question in my mind; Are British Airways and other carriers absolutely convinced that their loyal flyers offer very little value when it comes to influencing the purchasing decisions of less loyal flyers? Have the airlines been able to quantify that value and determine it isn’t worth the effort?

I mean, seriously, when as an airline you decide to allow a passenger who has paid an extra $30-40 to check a bag and select a seat, while at the same time telling another passenger who has earned elite status – presumably from flying on your airline several times on a variety of fares – that they can do neither … well, that tells me you don’t value loyal flyers very highly.

Read this very interesting thread in its entirety: HBO fares – Have to pay to select seat in advance [even for GCH/SCH/BCHs]

loyalty-and-royalty” by keane dasalla. CC BY-SA 2.0.

Comments

  1. Delta does the same. The ultra discount tickets do not get you a seat assignment or any elite benefits (upgrades, priority boarding, priority security). Fortunately, these fares are currently blocked in most corporate portals, but its a slippery slope.

    I get BA’s desire to see more revenue and therefore remove these benefits. But the fare should now be substantially less money as it isn’t a no-bags fare, it is an LCC competitive fare.

  2. I’m flying BA first transatlantic and club europe within europe and they don’t give me a seat assignment on the club europe portion. They want me to pay $30. It’s not just ultra discount tix…

  3. When people stop expecting BA service at Ryanair prices I’ll start sympathizing. If you want your benefits pay the higher fare. It’s the same thing Delta is doing here in the US and as a Delta flyer I have no problem with it.

  4. Fair enough Jason, but that sort of touches on my takeaway – that BA, and airlines in general, don’t seem to value loyalty. By taking away the seat selection benefit from elite members when those members do book a lower fare ticket – flyers who have presumably flown BA a lot and likely at times purchasing higher fare tickets – it seems to be saying, “We only value what you pay for an individual flight, and we don’t value your loyalty one iota.”

    My suspicion is that this is a mistake. That the airlines have run the numbers and concluded this to be true, but have failed to account for the value loyal flyer provide above and beyond their own travel spend.

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