Simon Calder: Strikers have discounted BA's travel premium
The man who pays his way
Saturday 03 July 2010
Perhaps you, like me, are studying your summer-holiday plans and feeling slightly foolish. I have bookings on British Airways during the school holidays, when flights could be jeopardised by more cabin-crew strikes. I bought the tickets many months ago, in the mistaken belief that the row over the imposition of new staffing could not possibly drag on so long.
Since many of my predictions about the course of this debilitating dispute have proved wrong, it serves me right that I possess a Heathrow-Amsterdam return ticket: short-haul flights from BA's main base are the trips under threat from the next series of cabin-crew strikes. But even though other passengers may be booking on rival airlines to avoid the uncertainty, I reckon my flights will go ahead. I confidently (and quite possibly wrongly) predict that the dispute will be settled within a week or two.
The longer that cabin crew threaten to strike without actually doing so, the more financial and reputational damage is wrought on BA – without the cabin crew taking a direct financial hit themselves. Surveying the market for forward bookings, it looks to me that passengers are deserting the airline in droves.
Owning a fleet of Airbuses and Boeings in August is as close as an airline can get to a licence to print money, particularly if the carrier has a good reputation for service and is blessed with the largest number of slots at Heathrow. British Airways normally extracts a handsome premium on its fares. The airline needs this margin in order to meet a cost base that is much higher than many competitors. But this summer BA appears unable to raise its prices above those of its rivals. Test bookings I have made for August and beyond suggest it is now having to discount heavily.
Take Heathrow-Los Angeles, departing 15 August for a week. Expedia quotes a whacking £1,211 on Virgin Atlantic: Sir Richard Branson's airline is cleaning up on flights to California. United's £981 return will be boosted by a few extra bucks because it sells, rather than gives away, drinks. Even Air New Zealand is able to pitch fares at a couple of pounds above BA's £945 return; operating between two points outside its home territory, the New Zealand airline usually has to undercut rivals to fill seats.
The Heathrow-Dubai route suggests travellers are booking away from BA into September. Emirates, offering a superior product in the shape of its A380, charges the most: £450 return. Normally BA and Virgin fight it out for second place at around £420. But Virgin can price tickets at £15 more than this, while BA is £15 less. To Delhi, British Airways is charging £80 less than the excellent Indian carrier, Jet Airways. And key business routes are showing weakness: a day trip from Heathrow to Frankfurt, at the start of the first full working week in September, sees BA at £108 – less than half Lufthansa's corresponding fare. And for valuable transit traffic on a route such as San Francisco to Nice, the Orbitz website shows BA undercutting other European airlines.
Unite, the cabin-crew union, has had enough, too. A dispute that has its roots in whether or not the most steward or stewardess on a long-haul flight should push a trolley looks flimsy when hundreds of thousands of public-sector workers look certain to lose their jobs. The latest ballot is over issues arising from the strikes in March and May. Unite has already given up on a demand for disciplinary action against union members to be dropped. The only stumbling block is the full reinstatement of staff travel. BA needs to make one more modest concession for the strike threat to be lifted.
Distance no object for BA cabin crew
The longer the BA dispute has gone on, the more the world – and fare-paying passengers – learn about the life of cabin crew. Inflight hats off to them for negotiating such benevolent terms and conditions, and for constructing enviable lifestyles.
Four hundred stewards and stewardesses commute to work from Spain (mainly Barcelona), and a similar number from the south of France. Strikers were told they would lose staff travel perks forever if they walked out, but BA now says it will immediately reinstate cheap tickets for commuting cabin crew if the present proposals are accepted.
More exotically still, 100 cabin crew combine working from London with residing in more far-flung and alluring parts of the world, such as California, South Africa and Australia. Even compared with two hours on the M25, that's a gruelling commute.
BA's only stipulation: they must report for work "suitably rested".
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