Being a fly on the wall during an airline's product team meetings would yield a treasure trove for any marketing or business student — or travel manager. Where suppliers once just strove to offer the best product possible based on the belief that buyers wanted quality they now look for a delicate balance between price and quality. The conversation is not about how good it is. It's about convincing people that the quality warrants the money that the revenue management team want.
British Airways, whose parent company IAG announced the launch of a low-cost, long-haul product less than a month ago, is investing £400 million (half a billion euros) in Club World, its long-haul business class product. The improvements will target catering, sleep and a new seat with "direct aisle access" for which read something resembling the herringbone seating which is currently available on carriers such as Virgin Atlantic and Air New Zealand.
WiFi is also set to be introduced on long-haul and short-haul routes over the next two years.
(Former BA partner Qantas also announced the introduction of WiFi this week and the balance has certainly tipped from WiFi being a "nice to have" to a "must have".)
That BA is improving its business class is not a surprise. Travellers who have recently flown on the carrier report a tired product much overdue for a refurb. As airlines need people who will pay for business class seats to subsidise the back-of-the-plane operation, it is a customer base that must be kept at all costs.
What's interesting is the focus of the improvements, namely the seat and the WiFi. Catering is on the list but isn't emphasised and probably for good reason. Food is more important for what it does to brand perception than for its actual consumption by business class passengers. As any cabin crew will tell you, the further forward on the plane you go, the less people are interested in actually eating on the flight. But do bear in mind how BA's CEO Alex Cruz's recently being quoted in a press interview that the carrier was considering dropping meals in economy was received.
The seat is what BA thinks is most important of all to its customers. It is what enables privacy, the ability to work and, most importantly, to sleep. It's why a company pays for its travellers to sit in business class. Attention to space and traveller welfare means the benefit of more traveller productivity both up in the air and on the ground after landing. The difference in price might sound a lot but think of what your employees cost per hour . . .
People used to look at a product before the price tag. They would already have decided whether they wanted the product and then looked to see if it was worth the price.
Despite recent attempts to develop more merchandising-led sites, online distribution inevitably means that booking behaviour is price-led. Online distribution — whether through an intermediary or direct — shows you the price and then lets you decide whether the product is worth it. It's why the increasing consumerisation of business travel behaviour means that decision-making is much more price led.
It's no wonder that airlines suffer continual angst as to why consumers worry about €5 on a booking site but have no issue with spending €50 once they're in an airport.