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Why more frills in legacy economy than low-cost?

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  • chornedsnorkack
    Rank 5 Registered User
    • Jul 2005
    • 1108

    Why more frills in legacy economy than low-cost?

    Why does legacy economy offer more frills - more legroom, recline, windowshades, free service et cetera - than low-cost airlines?

    A low-cost has to offer enough service that the people do not desist from flying or fly another airline. If they do, the airline loses the ticket income.

    A legacy which offers too little frills can likewise discourage people from flying or cause them to choose another airline. In which case the airline loses the economy fare as in the low-cost case - but lack of frills in Economy can also encourage the passengers, especially those who want to fly the specific schedule and can afford it, to buy Business tickets instead. In which case the airline gains the difference between Economy and Business fare thanks to having bad Economy service.

    So, why are the low-cost airlines offering less service than legacy economy?
  • Bmused55
    Aaahh Emu!
    • Oct 2003
    • 11136

    #2
    Originally posted by chornedsnorkack
    Why does legacy economy offer more frills - more legroom, recline, windowshades, free service et cetera - than low-cost airlines?

    A low-cost has to offer enough service that the people do not desist from flying or fly another airline. If they do, the airline loses the ticket income.

    A legacy which offers too little frills can likewise discourage people from flying or cause them to choose another airline. In which case the airline loses the economy fare as in the low-cost case - but lack of frills in Economy can also encourage the passengers, especially those who want to fly the specific schedule and can afford it, to buy Business tickets instead. In which case the airline gains the difference between Economy and Business fare thanks to having bad Economy service.

    So, why are the low-cost airlines offering less service than legacy economy?
    you've answered you own question mate.

    Low cost airlines keep the costs low by NOT offering such services as you mention. Or at least not without having to pay for it on board.

    Legacy carriers are still main stream airlines, trying to keep the traveling public that enjoy such services as part of their ticket price.
    Bmused55

    Keep thy airspeed up, less the earth come from below and smite thee.

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    • chornedsnorkack
      Rank 5 Registered User
      • Jul 2005
      • 1108

      #3
      you've answered you own question mate.

      Low cost airlines keep the costs low by NOT offering such services as you mention. Or at least not without having to pay for it on board.

      Legacy carriers are still main stream airlines, trying to keep the traveling public that enjoy such services as part of their ticket price.
      The problem is - if cutting services like seat recline, window shades or free food cuts costs of a low-cost airline then cutting the same services in the economy class would likewise cut the cost of a legacy airline.

      If a low-cost airline cuts too much service, they lose their passengers to other airline or they do not fly at all, so the low-cost airline only loses income. Whereas, if a legacy airline cuts service in Economy, they lose only if the travelling public stops flying them - if the public flies in their Business instead of Economy because the Economy is deliberately bad, the airline wins.

      Thus, legacies would seem to have more an incentive to offer bad service in Economy...

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      • Bmused55
        Aaahh Emu!
        • Oct 2003
        • 11136

        #4
        Originally posted by chornedsnorkack
        The problem is - if cutting services like seat recline, window shades or free food cuts costs of a low-cost airline then cutting the same services in the economy class would likewise cut the cost of a legacy airline.

        If a low-cost airline cuts too much service, they lose their passengers to other airline or they do not fly at all, so the low-cost airline only loses income. Whereas, if a legacy airline cuts service in Economy, they lose only if the travelling public stops flying them - if the public flies in their Business instead of Economy because the Economy is deliberately bad, the airline wins.

        Thus, legacies would seem to have more an incentive to offer bad service in Economy...
        There has always been two types of travellers.

        Type1: Doesn't care about the service so long as the ticket is cheap

        Type2: Values service and is ready to pay that little bit extra.

        Low cost airlines attract type 1, legacies attract type 2. So each market themselves for their respective client pool.

        Low cost airlines appeal to those on a budget. Legacies appeal to those who don't mind paying that little extra for the extra comfort.
        Bmused55

        Keep thy airspeed up, less the earth come from below and smite thee.

        My Blog
        My Designs

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        • chornedsnorkack
          Rank 5 Registered User
          • Jul 2005
          • 1108

          #5
          Originally posted by Bmused55
          There has always been two types of travellers.

          Type1: Doesn't care about the service so long as the ticket is cheap

          Type2: Values service and is ready to pay that little bit extra.

          Low cost airlines attract type 1, legacies attract type 2. So each market themselves for their respective client pool.

          Low cost airlines appeal to those on a budget. Legacies appeal to those who don't mind paying that little extra for the extra comfort.
          But why cannot legacies attract type 1 to the Economy Class and type 2 to Business Class, simultaneously?

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          • zoot horn rollo
            Lady Gaga is my queen
            • Sep 2005
            • 1504

            #6
            Originally posted by chornedsnorkack
            The problem is - if cutting services like seat recline, window shades or free food cuts costs of a low-cost airline then cutting the same services in the economy class would likewise cut the cost of a legacy airline.

            If a low-cost airline cuts too much service, they lose their passengers to other airline or they do not fly at all, so the low-cost airline only loses income. Whereas, if a legacy airline cuts service in Economy, they lose only if the travelling public stops flying them - if the public flies in their Business instead of Economy because the Economy is deliberately bad, the airline wins.

            Thus, legacies would seem to have more an incentive to offer bad service in Economy...
            I don't think I would upgrade to Business if I thought Economy was bad. I would just look for another airline and with the majority of legacy carriers then there usually will be at least one other airline flying that route (due to existing bilateral agreements).

            With low cost carriers, often there is no real competition on that route and probably not to that particular airport.

            I suppose the real difference is that LCCs maximise profits by playing the yield management game extremely well and continually reducing costs and the legacy carriers dont because they know they can jack up first/business class fares if they need to.
            I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
            Thank you

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            • chornedsnorkack
              Rank 5 Registered User
              • Jul 2005
              • 1108

              #7
              Originally posted by zoot horn rollo
              I don't think I would upgrade to Business if I thought Economy was bad.
              Originally posted by zoot horn rollo
              and the legacy carriers dont because they know they can jack up first/business class fares if they need to.
              Very well. If you think Economy is good, why would you ever pay the Business or, worse, First Class fares?

              Legacy carrier who offers too much frills in Economy would be in danger that both it costs a lot to provide frills to Economy, and that people no longer want to pay for Business even if they could afford to.
              Originally posted by zoot horn rollo
              I would just look for another airline and with the majority of legacy carriers then there usually will be at least one other airline flying that route (due to existing bilateral agreements).

              With low cost carriers, often there is no real competition on that route and probably not to that particular airport.
              Ah. So low-cost carriers cannot operate if there is a legacy carrier serving the same route and airport - and are unprofitable if there is more than one low-cost carrier on the same route and airport?

              Comment

              • DashQ
                Senior Member
                • May 2004
                • 307

                #8
                Originally posted by chornedsnorkack
                Very well. If you think Economy is good, why would you ever pay the Business or, worse, First Class fares?

                Legacy carrier who offers too much frills in Economy would be in danger that both it costs a lot to provide frills to Economy, and that people no longer want to pay for Business even if they could afford to.
                There is still a huge gap in terms of service and comfort between a good economy product and a business class product.

                Comment

                • zoot horn rollo
                  Lady Gaga is my queen
                  • Sep 2005
                  • 1504

                  #9
                  Originally posted by chornedsnorkack
                  Very well. If you think Economy is good, why would you ever pay the Business or, worse, First Class fares??
                  Because my company may have a particular travel policy that said for particular types of journey I was allowed to travel business class, even on relatively short intra European journeys.

                  Or else they are prepared to pay the extra to have the flexibility in changing flights and don't want to have the fare restrictions inherent in APEX tickets.

                  Remember that the full Economy fare is often not that far below the business fare (try turning up an hour before a flight and buying a long haul ticket - it's EXPENSIVE).

                  Let's face it the majority of people in business/first are travelling on business travel and being paid for by their employer and the number of people who actually pay full business class fares for themselves must be relatively small. You can get heavily discounted business/first fares and the rest of the people in business class are airline staff travelling on staff travel priviliges (been there - done it).

                  Originally posted by chornedsnorkack
                  Ah. So low-cost carriers cannot operate if there is a legacy carrier serving the same route and airport - and are unprofitable if there is more than one low-cost carrier on the same route and airport?
                  Of course they can operate if there is a legacy carrier and probably the LCC will do better. My reference to two leagcy carriers on a route refers to the pre-liberalisation days when everything was done on a bilateral basis. These days the EU allows anybody to fly anywhere (airport slots allowing).

                  I presume that LCC's do compete with each other on particular airport pairs but it would be really cut throat competition.
                  I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
                  Thank you

                  Comment

                  • chornedsnorkack
                    Rank 5 Registered User
                    • Jul 2005
                    • 1108

                    #10
                    Originally posted by zoot horn rollo
                    Because my company may have a particular travel policy that said for particular types of journey I was allowed to travel business class, even on relatively short intra European journeys.

                    Or else they are prepared to pay the extra to have the flexibility in changing flights and don't want to have the fare restrictions inherent in APEX tickets.

                    Remember that the full Economy fare is often not that far below the business fare (try turning up an hour before a flight and buying a long haul ticket - it's EXPENSIVE).
                    So effectively, one advantage of the Business is extra flexibility. Do the full-fare Economy tickets also have additional flexibility?

                    Comment

                    • MapleLeaf_330
                      Senior Member
                      • Jan 2000
                      • 473

                      #11
                      Also, many legacy carriers are flying into more accessible airports (central airports) making the difference in price potentially more attractive. Legacy carriers are also nailing the market on travellers who are transiting to international flights. Throw frequent flyer programs into the mix and their "economy" has many more advantages over the no frills model.

                      When I worked (briefly--thanks for shutting down YYZ) at BA, many people would also choose the World Traveller Plus. This was a great idea on BA's behalf. Alot of middle class travellers can afford better than economy but don't have the resources to go to full blown business class.

                      No frills, in my opinion, is really only for the passenger flying on a bare bones budget or those living in more rural places who don't want to travel to an urban airport. There is clearly a huge market for this type of traveller (students, low income, etc.), and the arena has made flying holidays more accessible than ever, but I think if those with the means to make a choice between the two products can, they will always choose legacy.

                      Comment

                      • zoot horn rollo
                        Lady Gaga is my queen
                        • Sep 2005
                        • 1504

                        #12
                        Originally posted by chornedsnorkack
                        So effectively, one advantage of the Business is extra flexibility. Do the full-fare Economy tickets also have additional flexibility?
                        I think so. They should do at that price but if you are paying full fare Economy then you could pay extra and go business class. But not that many people pay full economy rates anyway (as a daytime job amongst other things I used to calculate airline yields by class of service) preferring to pay cheap rates on APEX type tickets with a whole raft of restrictions eg can't make any changes once booked, non refundable etc.
                        I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
                        Thank you

                        Comment

                        • zoot horn rollo
                          Lady Gaga is my queen
                          • Sep 2005
                          • 1504

                          #13
                          Originally posted by MapleLeaf_330
                          Also, many legacy carriers are flying into more accessible airports (central airports) making the difference in price potentially more attractive.
                          The European LCCs (with one exception) don't interline, even with their own flights so if your flight is delayed and you miss the connection, tough.

                          At the end of the day, you pay your money and you take your choice.
                          I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
                          Thank you

                          Comment

                          • chornedsnorkack
                            Rank 5 Registered User
                            • Jul 2005
                            • 1108

                            #14
                            Originally posted by zoot horn rollo
                            I think so. They should do at that price but if you are paying full fare Economy then you could pay extra and go business class. But not that many people pay full economy rates anyway (as a daytime job amongst other things I used to calculate airline yields by class of service) preferring to pay cheap rates on APEX type tickets with a whole raft of restrictions eg can't make any changes once booked, non refundable etc.
                            So how do people travelling on company business justify paying extra to get the frills of Business Class instead of getting full fare Economy tickets for their travels where flexibility is needed?

                            Comment

                            • zoot horn rollo
                              Lady Gaga is my queen
                              • Sep 2005
                              • 1504

                              #15
                              Have you ever travelled in business class? People are prepared to pay extra because there is more leg room, the quality of service is better, you get get access to airline business class lounges (except if you are flying with BA), you get treated like a human being (except in BA - that's just my experience).

                              There's no point in anyone paying full economy when for few dollars more you can go business and most economy passengers are only looking for the cheapest fare and are prepared to accept the fare restrictions etc.

                              A few years ago, BA tried to reposition the airline more for the business market but it didn't work. People still want to travel economy on BA and the other legacy carriers, but people on a really tight budget will opt for the LCCs.

                              I suppose the way to look at it is to compare long distance rail with coach travel.
                              I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
                              Thank you

                              Comment

                              • chornedsnorkack
                                Rank 5 Registered User
                                • Jul 2005
                                • 1108

                                #16
                                Originally posted by zoot horn rollo
                                Have you ever travelled in business class? People are prepared to pay extra because there is more leg room, the quality of service is better, you get get access to airline business class lounges (except if you are flying with BA), you get treated like a human being (except in BA - that's just my experience).

                                There's no point in anyone paying full economy when for few dollars more you can go business and most economy passengers are only looking for the cheapest fare and are prepared to accept the fare restrictions etc.
                                For a passenger paying his/her own money and unwilling/unable to accept the fare restrictions etc. there is indeed not much point in not paying a bit more for more legroom, service, lounges and human treatment.

                                But a business passenger? They can justify not travelling in discounted economy and instead getting full-fare economy ticket so as to have the flexibility to be in time where ordered and not need to pay for forfeited tickets. How do they normally justify spending the money on legroom, service, lounges and human treatment if they could have saved a little by having the same flexibility with a full-fare economy ticket?

                                Comment

                                • Skymonster
                                  Rank 5 Registered User
                                  • Jul 2004
                                  • 1986

                                  #17
                                  On some European short-haul routes the difference between a fully flexible economy ticket and a business class ticket can be less than 10. At that price differential, the extra is easy to justify on the basis of better service, peace and quiet in the lounge before departure, priority baggage processing, fast-track through security at some airports, more frequent flyer miles, etc. However, some corporates have a policy of Y-class only and the full economy fare really does shaft those travellers. Note that I am talking about the difference between full economy and business on short-haul routes - the difference between discounted economy and business on short-haul, and between any economy fare and business on long-haul, is usually much greater and can be difficult to justify even given the extra frills available.

                                  Originally posted by Bmused55
                                  There has always been two types of travellers.
                                  Type1: Doesn't care about the service so long as the ticket is cheap
                                  Type2: Values service and is ready to pay that little bit extra.
                                  There is now a third type of passenger - those who are stupid or ignorant of airline pricing, and think or assume that a low-fare carrier will always be cheaper than a full-service/legacy carrier. (Case in point a few weeks ago I went to FRA for the day and Ryanair to Hhan was more expensive than BA to Frankfurt itself).

                                  A
                                  "Light travels faster than sound-that's why some people seem bright until they speak"
                                  AirTeamImages
                                  - the best aviation photography

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                                  • zoot horn rollo
                                    Lady Gaga is my queen
                                    • Sep 2005
                                    • 1504

                                    #18
                                    Originally posted by chornedsnorkack
                                    For a passenger paying his/her own money and unwilling/unable to accept the fare restrictions etc. there is indeed not much point in not paying a bit more for more legroom, service, lounges and human treatment.

                                    But a business passenger? They can justify not travelling in discounted economy and instead getting full-fare economy ticket so as to have the flexibility to be in time where ordered and not need to pay for forfeited tickets. How do they normally justify spending the money on legroom, service, lounges and human treatment if they could have saved a little by having the same flexibility with a full-fare economy ticket?
                                    Company travel policies because the vast majority of business passengers don't pay for the tickets out of their own pocket. And many large corporates will do deals with travel agents for bulk discounted tickets in whatever class.

                                    The place I used to work for always used business travel class for duty travel but where I work now its always economy class.
                                    I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
                                    Thank you

                                    Comment

                                    • zoot horn rollo
                                      Lady Gaga is my queen
                                      • Sep 2005
                                      • 1504

                                      #19
                                      And getting back to the original point of the thread, I recently travelled LHR-VIE-VAR with Austrian Airlines and I was amazed at the lack of 'frills' in a so called legacy carrier - no free inflight meal. It was very much LCC standard service.

                                      I was even charged a separate charge for the issue of a paper ticket and would have been charged for an e-ticket had it been available, which it wasn't.
                                      I don't want to die, because I don't want to end up like Anita Dobson - Frank Sidebottom, actually.
                                      Thank you

                                      Comment

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