Thursday, April 02, 2009
The economics of flying business class
Of late, I've been flying around quite a bit - and been pondering the economics of flying business class. In short, although the airlines are trying hard, I still don't think the maths make sense for anyone to pay out of their own pocket for a business class ticket.
Over the last couple of years, the airlines have really raised their game in trying to differentiate in lots of little ways between business and cattle class. Some examples of those little touches:
* Priority boarding - over a red mat (hardly a carpet) at the gate. Great. EasyJet charges a premium for that (so you can be first on the bus, as cheapo airlines avoid jetway fees wherever possible). Value? Maybe $10 if you can find people who would pay for it.
* Priority tags on hold baggage. Theoretically a good idea but in reality the bags all arrive together, or maybe within a couple of minutes. Value? About the same as the tip you'd give the baggage porter instead. $3.
* A little piece of chocolate on your seat. Great! I'm convinced: sell me a business class ticket. But seriously, I don't always want to eat a piece of chocolate when I get on board a plane - I'm not 7 years old any more - and if I don't see it, sit on the chocolate and it melts, I've got a dry cleaning bill (and an embarrassing situation to explain). Value: $0.75.
* A bottle of water to go with your chocolate. Not bad at airport prices per liter of water. Value: $3.
* That business class meal with real cutlery and crockery. I recently asked an attendant which of the standard "chicken or beef?" meals she recommended. Her answer: "Eat at the airport!" The stuff served in economy class isn't great - but then I don't expect any business class meals to qualify for Michelin stars any time soon (even though they do use puffed-up prose). Value: $10 and I am being generous.
* The free copy of a magazine on board. OK, not bad, but often eco passengers can snaffle these too. Value: $0.
* Another free chocolate before you land. $0.75.
* Lounge access. Ah yes, the lounge. In general, these are pretty nice - with the exception of Lufthansa's horrible little overcrowded, overheated, under-seated corner of T2 at London Heathrow. All kinds of goodies in here: free snacks and drinks ($15 if you try hard), free wi-fi ($10). On the other hand, as I don't generally get lounge access, I arrive at the airport as late as possible - getting an extra 30 minutes in bed (or in a traffic jam). I know there are showers etc in some lounges - which is great value if you fly in overnight and have to go straight to a business meeting. Thankfully, I always avoid having to do that!
Time to do a sub-total: I make that $52.50. Each way.
Compare and contrast with the "special offer" that BA recently offered me for a London-Munich flight - a one-way upgrade for $150. For a total of two hours on board, I declined the $50-an-inch extra legroom. For a long haul at the same price, I'd have jumped. However, the price delta runs to four figures - at least an extra $1000.
The airlines have also gotten wise to people booking economy and using miles to upgrade to business. Actually, spending 35,000 miles with Star Alliance airlines for a one-way trans-Atlantic upgrade seems to be pretty good value - so there must be a catch.
There is. My last two "economy" class trans-Atlantic tickets were super-cheap: between $500 and $700. After deducting airport taxes etc, the revenue to the airline was only around $100 each way. And because of this, there was No Way In Hell that they were going to let me upgrade my class W (I think) ticket to business class. In fact, I've even heard that US airlines are now trying to charge a premium for bulkhead-row economy class tickets.
To conclude this ramble, yes there are clearly benefits to flying business class - I didn't even mention the potential value of the flexible ticket. But I think the best solution is the one I first heard of through an old friend - who flies economy class, but then spends a little bit extra on a hotel, and enjoys the luxury over the duration of his business trips. Works for me!
Over the last couple of years, the airlines have really raised their game in trying to differentiate in lots of little ways between business and cattle class. Some examples of those little touches:
* Priority boarding - over a red mat (hardly a carpet) at the gate. Great. EasyJet charges a premium for that (so you can be first on the bus, as cheapo airlines avoid jetway fees wherever possible). Value? Maybe $10 if you can find people who would pay for it.
* Priority tags on hold baggage. Theoretically a good idea but in reality the bags all arrive together, or maybe within a couple of minutes. Value? About the same as the tip you'd give the baggage porter instead. $3.
* A little piece of chocolate on your seat. Great! I'm convinced: sell me a business class ticket. But seriously, I don't always want to eat a piece of chocolate when I get on board a plane - I'm not 7 years old any more - and if I don't see it, sit on the chocolate and it melts, I've got a dry cleaning bill (and an embarrassing situation to explain). Value: $0.75.
* A bottle of water to go with your chocolate. Not bad at airport prices per liter of water. Value: $3.
* That business class meal with real cutlery and crockery. I recently asked an attendant which of the standard "chicken or beef?" meals she recommended. Her answer: "Eat at the airport!" The stuff served in economy class isn't great - but then I don't expect any business class meals to qualify for Michelin stars any time soon (even though they do use puffed-up prose). Value: $10 and I am being generous.
* The free copy of a magazine on board. OK, not bad, but often eco passengers can snaffle these too. Value: $0.
* Another free chocolate before you land. $0.75.
* Lounge access. Ah yes, the lounge. In general, these are pretty nice - with the exception of Lufthansa's horrible little overcrowded, overheated, under-seated corner of T2 at London Heathrow. All kinds of goodies in here: free snacks and drinks ($15 if you try hard), free wi-fi ($10). On the other hand, as I don't generally get lounge access, I arrive at the airport as late as possible - getting an extra 30 minutes in bed (or in a traffic jam). I know there are showers etc in some lounges - which is great value if you fly in overnight and have to go straight to a business meeting. Thankfully, I always avoid having to do that!
Time to do a sub-total: I make that $52.50. Each way.
Compare and contrast with the "special offer" that BA recently offered me for a London-Munich flight - a one-way upgrade for $150. For a total of two hours on board, I declined the $50-an-inch extra legroom. For a long haul at the same price, I'd have jumped. However, the price delta runs to four figures - at least an extra $1000.
The airlines have also gotten wise to people booking economy and using miles to upgrade to business. Actually, spending 35,000 miles with Star Alliance airlines for a one-way trans-Atlantic upgrade seems to be pretty good value - so there must be a catch.
There is. My last two "economy" class trans-Atlantic tickets were super-cheap: between $500 and $700. After deducting airport taxes etc, the revenue to the airline was only around $100 each way. And because of this, there was No Way In Hell that they were going to let me upgrade my class W (I think) ticket to business class. In fact, I've even heard that US airlines are now trying to charge a premium for bulkhead-row economy class tickets.
To conclude this ramble, yes there are clearly benefits to flying business class - I didn't even mention the potential value of the flexible ticket. But I think the best solution is the one I first heard of through an old friend - who flies economy class, but then spends a little bit extra on a hotel, and enjoys the luxury over the duration of his business trips. Works for me!
Labels: rant
# posted by Nesjo : 09:49
Subscribe to Posts [Atom]