Thursday, 23 October 2014

WHEN IT COMES TO CUTTING COSTS: CHEAP ISN'T ALWAYS CHEERFUL

This morning, Iceland’s WOW air launched a one-way air ticket for transatlantic flights between London and Boston and Washington DC priced at just £99. No one doubts this is an amazing price. But, of course, there’s a snag. The flights all require a stopover in ReykjavĂ­k, adding between two and five hours to each leg.

Iceland's WOW air.

And just over a week ago, it was reported in the UK press that a major – although unnamed – ‘US legacy’ airline is considering introducing an ‘economy minus’ cabin that could feature even tighter gaps – just 30 inches – between passengers’ seats. If this goes ahead, it will also no doubt result in cheaper airfares. But is it also proof in point that cheap is not always cheerful?

In the business travel industry, there is undoubtedly still pressure on travel buyers to cut costs. Nearly a third of respondents in the annual Business Travel Show survey claimed their 2013 budgets were lower than in 2012 and 24pc said their airline spend would be reduced for 2014, which has led to strong demand for budget offerings.

This was reflected in the news in May when easyJet reported a 6.3pc increase in its first half-year revenue pointing to its success in the business travel market as the cause: 12 million business passengers had flown with easyJet in the 12 months to 31 March for the very first time.

In August, Ryanair also announced it was entering the business travel market with its ‘Business Plus’ ticket, which includes flexible ticketing, priority boarding and a ‘premium’ seat.

However, and this is where I think things get interesting, The Daily Telegraph polled its readers about this announcement asking, ‘Would you ever fly Ryanair for business?’ Of the 2,216 readers that responded, 28pc said yes, they would, because price is that important, but 73pc said no, comfort and service take priority.


Ryanair for business.

The reason I find this interesting is because it shows that, when it comes to the business travel industry – yes, there is pressure on travel managers to get more for their money, but they are also under pressure to keep travellers happy, and balancing both is a fine art, which means cost cannot always come first, and the likes of WOW air will always lack the wow factor in business travel.

This post was written by David Chapple, event director of the Business Travel Show. Find out more about the show at www.businesstravelshow.com. Contact David at david@businesstravelshow.com. 







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