Could you be paying double the price for the same airline experience?
9 Mar 2018 - by Sue van Winsen
Low-cost carriers, or LCCs, can be a very budget-friendly option for corporates, as you have the choice of paying only for the ancillaries or ‘extras’ your travellers require, instead of having everything bundled into the fare, as happens with a full-service airline.
But perhaps what’s even more surprising is that you could be paying far more than double the price for a similar experience, when comparing booking a business-class seat and an LCC seat with all the frills, says Kirby Gordon, FlySafair’s head of sales and distribution.
“If you were to take our fare and add on all the options, such as refundability, lounge access, extra leg-room seats, priority boarding, extra luggage allowances, you could quickly build an experience that would rival any business-class service on a local route,” says Gordon.
He adds: “Granted, a business-class seat might be an inch wider and you may get a hot airline lunch as opposed to a fresh sandwich, but other than that you will have a full-on business-class journey booked. The only difference is that you could get all that from around R1 300 with an LCC like FlySafair, whereas with a full-service carrier you’re looking at R3 600 for a business-class seat.”
Room for negotiation
Corporates should be mindful that there could be opportunity to negotiate with LCCs when it comes to the extras included in their fare.
Gordon points out: “Low-cost carriers tend to price fares on a knife-edge, so there’s generally little to no fat in the actual fare itself, which means it’s tough to find value on the base pricing. What really helps, though, is when a corporate has a keen sense of what they and their travellers actually need from the airline and try to find ways to accommodate that in the negotiation.
“This can vary so much – sometimes a client needs flexibility and they’re even happy to pay a small premium to ensure that they’re not penalised for changes. Other times, what’s essential to them is some sort of service level agreement whereby they have a direct point of contact at the airline. We’re all here to make a living, but there are definitely ways that we can work together to find the best-fit solution that creates maximum value for both parties,” he adds.
Most requested extras
According to Luane Lavery, brand communication manager for kulula.com, pre-paid seats are the most popular ‘extra’ purchase for corporate travellers. “They love our first row seats at the front exit as they have the most extra leg-room space and this product gives the time-conscious corporate traveller the opportunity to disembark first, which helps these passengers to get to their business appointments on time,” she says.
Other popular choices are the over-wing exit rows, also due to the extra leg-room and space that makes it easier to work on a laptop during the flight, but Lavery points out that these seats are subject to the passenger meeting specific conditions. “For this reason, kulula.com introduced ‘Stretch Zone’ which is an area directly in front of and behind our over-wing exit and offers additional leg-room, with no conditions required to occupy seats.” Aside from pre-paid seats, extra bags, as well as kulula.com’s Flight and Bag Cover (underwritten by Chubb) are quite popular with specific corporate customers who need to travel with product samples or special equipment.
Gordon says when it comes to corporates, many clients are interested in fares without checked luggage, which he says offer great savings for overnighters or day trippers who can easily get away with hand luggage only. When it comes to extras, he agrees that seat selection does well, as does priority boarding.
“We’ve also launched new technology on board where passengers can purchase catering, using cards for payment. This is receiving a lot of interest from corporates as they can use company cards, or pay in advance and then claim back from their companies using the receipts that the machine generates,” says Gordon. He adds that the airline is investigating ways to generate credit for catering that can be secured within the actual fare or booking process.
FlySafair’s standard fare offers flexibility with two penalty-free changes, which Gordon says is proving very popular.
With other carriers, corporates need to consider whether travellers are likely to change flights – and if this is the case, they should consider booking flexible fares – or risk having to pay full fare for a new flight. For example, kulula.com offers Semi-Flexible and Flexible Fare brands, which provide for lower-priced or free flight changes and either a 50% or 100% refund, depending on the brand selected.
“Flexibility to amend travel plans Is usually the most important feature for corporate travellers,” adds Lavery. “The more flexible brand purchased, while more expensive, is a more cost-effective option for corporate travelers, who tend to be more inclined to change plans. Travel bookers should weigh up the initial price, which is generally not much more between the lowest fare and our next brand up, which will work out less if there are flight changes made to the itinerary.”
Another detail to keep in mind is that travel extras are generally non-refundable. “Corporate travellers need to be aware of the relevant business rules for the product they select if travel plans are not set in stone. Extra bags are refundable up to 24 hours prior to flight departure, but travel insurance is not refundable at any time, given that the customer is covered from time of purchase,” she says. Extras can be amended with a flight change and moved at no additional cost to the new flight booked.