As documented in the press recently, British Airways has been taking some heat for launching its buy-on-board program for – previously free – food and drink on domestic and European flights.
In America, many of us are too young to remember the days when the quality of airline food was akin that of a catered meal. In fact, this Forbes article outlines that finding ways to create new revenue streams has been a “sport” that airlines have engaged in for decades, as former American Airlines CEO Robert “Bob” Crandall found that he could save $100,000 annually by removing olives from the salads that the carrier served. Perhaps that decision, made in the 1980s, heralded the beginning of the end of luxurious airline service in coach.
Back to the subject at hand: while I was initially disgusted at the prospect of a Skytrax four-star airline charging for food, I’ve come to realize that BA is in a predicament which not many other European carriers find themselves in. This is because Norwegian Air Shuttle has been selling extremely low fares on transatlantic routes between a major U.K. airport – London Gatwick – and a variety of U.S. cities, including Boston, Fort Lauderdale, Los Angeles, New York JFK, Oakland, and Orlando.
Even so, BA will still likely remain preferred by the majority of business and first class passengers, as BA Chief Executive Alex Cruz claims Norwegian’s low fares “create new demand,” thereby implying that the majority of Norwegian travelers are tourists who might not have had the desire to travel without such low fares. Yet through offering fares that are markedly lower than anything BA had offered up to this point, Norwegian is – by proxy – threatening BA’s superiority at not just Gatwick but also Heathrow, as some British passengers may choose to bypass the busier Heathrow for Gatwick in favor of lower fares and a smaller airport.
Perhaps I’m being too general in saying this, but I believe that the majority of foreign airlines have better on-board service and offerings than American carriers, particularly on long-haul flights, but also on short-haul flights. Even China Eastern Airlines – a carrier which is majority-owned by the Chinese government – serves meals in economy class on its domestic flights between Beijing and Shanghai, something that American Airlines doesn’t even do for its transcontinental routes. So when BA announced this decision, I have to say I had to evaluate whether it was in danger of letting its reputation dwindle to the standard which we see in America – the “Big 3” American carriers (American, Delta, and United) are labeled three-star airlines by Skytrax; BA is a four-star carrier.
Despite my fear, which may well be premature, BA’s need to lower prices is evident. With that in mind, the most effective way to lower prices while still maintaining a healthy profit margin is to trim expenses. In addition to doing this through eliminating economy class meal service on European flights, BA has started to make changes on its long-haul flights, too, as it eliminated the second of two meals served on westbound transatlantic flights. Of course, this still puts it a cut above Norwegian in that respect, as the latter doesn’t offer any complimentary food or drink on its long-haul flights, but it’s a notable reduction nonetheless.
BA will likely be judged upon whether it can maintain its quality reputation in the face of reducing its offerings. Whether that is attainable remains to be seen.