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Fares Fair

For locally based travellers, trying to conduct ones business travel without involving any of the Lufthansa Group of airlines is like driving to Bourgas and not seeing a black car flash past you in the outside lane: impossible. Not that this is being dis-respectful to both Lufthansa and Austrian who are the main brands we see in Bulgaria. Indeed without them the country would be far worse off commercially as business people rely on them to help them attend meetings, conferences and events and generally to help them meet their clients and suppliers on a face to face basis. Whilst Lufthansa and Austrian have remained fairly consistent through the years, things are changing in their stable.

Starting with Austrian, they are re-launching with a subtle new identity; ‘my Austrian’. The airlines first plane to carry the new livery has already taken to the air and the rest of the fleet will soon follow. What travellers will soon become aware of is a change in how their short haul (European) tickets are priced. Instead of the traditional, complicated and illogical myriad of booking classes in every type of travel class, Austrian will have just four tiers of fares starting from the autumn with each tier having a different service feature such as the option for the ticket to be changeable, to allow checked baggage and to pre book seats.

This does not mean that fares, once set will remain the same no matter if one books 6 months or 6 hours in advance, the airlines will still be able to manipulate the new fare structures depending on whatever yield management concepts they presently engage.

Austrians parent airline, Lufthansa has already announced that it too will adopt the same or a similar type of tiered fare structure within its Germanwings brand. They have named the levels as “’Light, Classic, Flex and then Business”.  For those unaware, Germanwings is the Lufthansa short haul brand that operates throughout Europe from most of the German Airports with the exception of from the carriers main hubs of Munich and Frankfurt where the master ‘”Lufthansa’” brand prevails. However since the Germanwings crash in France during March, things have perhaps, not surprisingly, gone quiet from the Lufthansa group and many aspects of how the theory of the new fares will be conveyed in practice have yet to emerge, indeed, also if the Germanwings brand will survive.

This new type of fare structure is not new and airlines such as KLM, BA and Air France have been experimenting with elements of this new structure for some time; to good effect. Some would say that its very much in the mould of Low Cost carrier type fares, which to some extent is true and indeed may also be an admission that the fare paying public prefer such simplicity in the modern era. The reality though is that each airline is now doing their own thing with fares and soon there will not be any standard practice for pricing air fares as people have become familiar with in the past. This is not to say that the KISS approach (keep it simple, stupid) is a bad thing for it is not; the simpler the better, its just that passengers risk getting confused on what the have to book and what they will get when they do book when  they use different airlines. One would think perhaps, that IATA, the body that oversees the industry, would establish updated and consistent fare guidelines for each member airline to adhere to. However IATA dance to the tune of the airlines not the passenger and if the airlines don’t want any standardisation then indeed, there will be no standardisation. For them, the more complicated the better the chance there is reap in more revenue.    

 

Mark Thomas

Managing Director