Firmly established in the airline industry and high in leisure travellers' awareness; low-cost carriers are here to stay. I wanted to look at some of the pros and cons of using these airlines outside the leisure or consumer market and consider their viability for the business traveller, whether they are an engineer travelling offshore to an oil rig or a road warrior travelling to sales meetings.
The old 'them and us' differentiation between legacy carriers such as Lufthansa, British Airways and Air France versus the new entrants such as Ryanair, easyJet, SpiceJet and dozens of others is eroding almost to the point of complete disappearance. Travellers want to get from A to B using a safe, cost effective method and knowing in advance what will and will not be included in their air fare.
So as the differences between 'legacy' and 'low cost' are becoming less and less and distinct, where do they differ and what can they offer?
Firstly, the habit of calling the non-legacy carriers low cost is perhaps a misnomer when it comes to fares. Crucially, these 'web airlines' do not publish their fares. We have all seen the 'Fares from £19.99' teaser ads and email campaigns. These marketing ploys do attract travellers but web airlines operate a supply and demand driven pricing structure, where demand dictates price.
With no published fares, it's effectively possible for every person on a web airline aircraft to pay a different price for their tickets. So budgeting in advance is a bit more hit and miss than the case with a legacy airline which operates the 'seat bucket' principle where prices vary, but within a known set of parameters.
Book with a web airline and, with very few exceptions, you'll be treated just the same as any other passenger. Business travellers aren't recognised or get anything different to the rest of the passengers. Paying extra for early boarding or a seat near the front is available to any passenger on some carriers. Loyalty programmes also exist but are not comparable to the legacy airlines that offer lounges, potential upgrades and other regular traveller features.
When booking a low-cost carrier fare directly, there are several differences between these and what a legacy airline offers business travellers.
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Booking direct with low-cost carriers has some complications and can incur extra fees ©paisan191/iStock
- No credit facility is extended by the airline or booking website. Payment is instant - usually by your credit card or in some cases the agency credit card.
- It's prohibited to use corporate cards for some bookings. For certain internet airline ticket purchases, the individual passenger's credit card details are mandatory and settlement cannot be made via a travel agent's corporate card. With some web carriers the actual card used to purchase online MUST be presented at check-in; this is a fraud avoidance measure but means that corporate or agency cards can't be used.
- Limitations to make changes. Agents don't control the web airline bookings in the same way as they do with legacy carriers. Even if the fare purchased from a web carrier allows changes, in many cases these can only be handled online or by the carrier's own call centre. These call centres may work limited hours and may only talk to the actual traveller rather than allowing an agent to process changes. Penalty fees, where applicable, will be collected immediately and require a credit card.
- No connection guarantees. Low-cost airlines do not offer guaranteed flight connections. For example: even if booking the same web airline for two sectors connecting via a hub airport, the bookings are treated as two separate transactions. This means that if the traveller's first flight being delayed or cancelled and they miss the second flight, the web airline will take no responsibility for refund or rebooking.
- No escalation of complaints. If an issue does occur any complaints or compensation claims will be handled as if you were a normal consumer.
- There are hidden costs. It can be difficult for travellers to understand the total price of travel on web airlines due to extra charges. For example they will often have to pay for their meal, seat requests, baggage, even coffee. This can make the 'cheap fare' more expensive than the legacy carrier equivalent when all the component costs are totalled up.
- Traveller tracking is not easy with a web airline booking. If a TMC makes the web airline booking then they have to 'copy' details of the booking into their reservations system in order to track the traveller, provide pre-trip information, handle reporting, invoicing and 24 hour service. This extra work can often result in an extra TMC service fee.
We all agree that low-cost airlines have disrupted travel. Some legacy airlines have responded with great new services and ticket options driving yet more choice for business travellers. Many legacy carriers are now providing very low fares with limited flexibility and zero or one piece baggage allowance. These fare types will often match web airlines and when considered alongside some of the restrictions and challenges listed previously, may provide better value than the so called low-cost carrier.
Conversely, some web carrier distribution and marketing is now recognising the business traveller. A few but growing number of web airlines now distribute content via global distribution systems (GDS) such as Travelport and Amadeus. These are the legacy airline distribution channels and the web airlines' theory is that TMC's using this channel will be more likely to sell their services if they are easy to access. However, the web carriers do not often display their full range of air fares via the GDS, necessitating the agents to check on the carrier websites. This creates a challenge for all parties when attempting to display the 'true cost'.
Choosing a web airline over a legacy carrier is as much a matter of cost and schedule as anything else for the leisure traveller. However for the company traveller, different criteria applies. Clearly both have their positive and negative features, but for travel managers and bookers they must consider all the factors and have access to the highest quality data available to make the best choices for their overall programme.