Traditional airlines mastered the art of opaque pricing early on in their existence. The classic example is a business man that booked through a business travel agency the day before depature who paid €500 for his flight, while sat next to him is a student that booked online three months before departure and paid €25 ! This is an area of airline pricing that is constantly on the move as airlines seek to maximise their revenue but crucially get their seats full (load factor).

As this article in the Telegraph highlights consumers are constantly looking for bargains and discounts over and above (or should that be below?!) the ticket price on all sorts of products and services – not just travel. As many airlines now sell over 90% of their flight tickets online, we had a quick look at a few of the major airlines to see if they had discount codes or not.

• Ryanair – No discount codes in the booking form.
• easyJet – There is a “promo code” in the booking form, but our research this is only for discounts on “speedy boarding”.
• BA – There is no discount code or voucher code at Brititsh Airways website.

Discount codes aside, when was the last time you went onto one of the large airline websites and there wasn’t a “sale” , “discount” or “special offer” ? (always time limited and always hard to find the seats at the advertised price :) )

The article in the Telegraph finishes with “The only worry is that we may find the marked prices on menus and clothes continue to creep up to pay for all of these vouchers, so that only the savvy get the discounts, and the less internet-aware pay the price.”….. That has been happening in the travel industry for many, many years.

Here’s a quick stat attack from the aviation industries latest hurdle “Eyjafjallajökull” !’

If you have any stats of your own you would like added please leave a comment below.

• 100’000 – The number of Britons stranded in Europe.
• 102 – Flights from Malaga cancelled on 16th April 2010.
• 20’000 – Feet high that the volcanic ash cloud has been at.
• 952 – Flights cancelled by Ryanair due to operate Sunday 18th April 2010.
• 28’000 – Commercial flights operated in European air space on an average day.
• 11’000 – Commercial flights operated in European air space on 16th April 2010.
• 800 – The number of Icelandic residents evacuated from north & west of the volcano.
• 18 – Months – the duration of the eruption of Eyjafjallajokull 2 centuries ago.
• 130 - Million Pounds -The estimated daily revenue lost by airlines according to IATA.
• 5100 - Euros – The taxi fare paid by John Cleese to go from Oslo to Brussels after a cancelled flight.

Feel Air has raised $37 million start up funds to dry lease two Airbus A320 and plans to operate Stockholm and Oslo to New York and Bangkok. The new airline hopes to start operating the low cost long haul flights in time for the lucrative Easter break in 2010.

No doubt the fledgling airline has already been engulfed by job applications but aviation analysts are quick to point out the the failure rate among new airlines is high and long haul airlines in particular are very sensitive to oil price spikes and downturns in economic fortune. The seasonality looks good. It is well known that airlines usually make money on New York routes in the summer but lose money in the winter while Thailand is very popular amongst Scandinavians with many Norwegians and Swedes investing in property and timeshare there.

How do you rate Feel Air’s chances of success ? Please leave a comment below.

Iceland Express is also offering New York flights from Scandinavia

Feel Air livery

Strengths of Iceland Express

1) One way pricing – no restrictions, no complex rules.
2) Easy to search for and book flights on their website.
3) Short layover in KEF possible.
4) Avoid large airports like Heathrow & Charles De Gaulle fly from local airports like Frankfurt Hahn.
5) No rip off fuel supplement.
6) Strong awareness, large customer database in Nordics.
7) Single class, not treating economy pax as “third class” – potential to convey that “all guests are appreciated“.
8) Can cherry pick best months of operation.

Weaknesses of Iceland Express

1) Quality perception – no free drinks or meals, no seat back entertainment.
2) No onward connections in US.
3) No codeshare / distibution partner in US.
4) Not direct flight.
5) Unrestricted fares = dilution of yield.
6) No loyalty scheme.
7) No business & first class to cross subsidize economy.
8) Little or no brand awareness in US.
9) No child discount.

Opportunities for Iceland Express in Trans-Atlantic market

Ancillaries
- Premium economy product.
- Hotels and cars (inbound & outbound).
- Onward connections e.g. JetBlue ?
- Higher value on non EU travel insurance.

Adding Value
- Add margin with in-house package tours.
- Iceland stopovers with accommodation and excursions.

PR
- PR effect should increase web visits & newsletter database – help boost existing route network.

Threats to Iceland Express in Trans-Atlantic market

1) Falling US$ (recent trends) leads to less travel originating from USA.
2) Volatile US$, ISK and other currencies concerned creates currency risk.
3) Established carriers have capacity, distribution and fare rules to depress yields on specific competing itineraries but retain their own margins.
4) US carriers notoriously protective of their patch.
5) Low consumer confidence, particularly in US, UK and Iceland.
6) Low cost, long haul  services possible from Air Berlin following LTU, Condor purchase and 787 order.
7) EU-US open skies allows airlines to operate more direct services e.g. BA from CPH-JFK.
8) Perception that low cost long haul always fails – Zoom being recent example.

Clearly Michael O’Leary is as gifted at writing as he is at delivering financial results for Ryanair PLC. Anyone who has read one of his letters to the press must admit that he writes with a certain force, a touch of humour and a large dose of arrogance. Here is a recent comment from “MOL” on the subject of mobile phone usage onboard Ryanair flights.

“We’ve thus far had no complaints of any passengers who are annoyed by their cathedral-like sanctity of a Ryanair flight being besmirched by somebody on a mobile call“

Here is why I think Ryanair / Michael O’Leary should publish a blog :

• They are already the kings of free publicity. This would help cement their position and feed the flames.

• The blog would get hundreds of comments on every post, partly just because of who he is but also because each post would most likely be controversial and would incite comments from all over the world.

• As above but for inlinks from other blogs and websites. This will help the blog and the Ryanair website in search engines.

• The Ryanair blog could be used in the same way the Ryanair news section is now – to announce route changes, special offers and the more “political” manoeuvrings such as threatening to close bases if this and that doesn’t happen in Ryanair’s favour.

Airlines with successful blogs include Iceland Express and Southwest airlines. A lesser known example is the flyforbeans blog which doesn’t have many posts but has at least got articles from the most of the management of this long planned start up airline. Richard Branson also has a blog.

Here are some airlines you might like to follow on twitter. Please use comments to let us know who we have missed and who are your favourites airlines to follow on twitter.

Air France - http://twitter.com/AirFranceUK

Air New Zealand - http://twitter.com/flyairnz

Air Southwest - http://twitter.com/AirSouthwest

British Airways - http://twitter.com/British_Airways

Cathay Pacific - http://twitter.com/Cathay_Pacific

Thomas Cook - http://twitter.com/ThomasCookUK

KLM - http://twitter.com/klm

Iceland Express - http://twitter.com/icelandexpress

Jet2 - http://twitter.com/Jet2com

Qantas - http://twitter.com/qftravelinsider

Qatar Airways - http://twitter.com/qatarairways

SAS - http://twitter.com/SASGroup

Singapore Airlines - http://twitter.com/SQairlines

Swiss International - http://twitter.com/SwissAirLines

Transavia - http://twitter.com/transaviacom

Virgin Atlantic - http://twitter.com/VirginAtlantic

Results from a Skyscanner poll have been released today detailing which aspects of air travel customers find most annoying. Hidden charges came up in first place with almost a quarter of the votes.

Close behind with 23% of the vote, was queuing for security and boarding, followed by lack of seat space (15%), irritating fellow passengers (11%), having to check in so early (8%), bad staff attitude and poor customer service (6%), sitting on the runway waiting to take-off or disembark (4%), having to bus to and from the plane (4%) and waiting for your luggage at the other end (4%).

What do you think ?

At airline-news we have asked before what annoys you most about airline websites, but what about this ?

Suggestions from Skyscanner on what airlines could charge extra for:

•    Charge a successful landing fee – to be paid upon disembarking the aircraft following a safe touchdown
•    Coin operated overhead lockers, window blinds and seat lights
•    Charge a premium disembarking fee – pay to get off the plane first
•    Fee for releasing oxygen mask, then extra charge per minute of oxygen consumed
•    Extra charge for emergency exit seats
•    New charge for hand luggage based on weight
•    Passenger weigh-in: surcharge of £1 per lb.
•    Surcharge for children as they generate less revenue from on-board sales (they can’t buy alcohol)
•    Life jacket optional – extra fee if you want one
•    Extra charge for newer planes
•    Standing room only – extra charge for use of seat
•    Extra charge for bookings made through non-English site (to supplement translation costs)
•    Charge for using electronic devices on-board
•    Charge extra for the captain’s weather forecast at the destination
•    Extra charge for having a co-pilot
•    Pay pilot minimum wage, but allow them to make money on tips; pass their hat around upon successful landing
•    Order planes without windows, as they will be cheaper and lighter

Here is a roundup of airline credit card charges researched by the Airline News website 11 March 2009:

It is hard to make direct comparisons because some airlines charge the credit card fee per booking while others charge per passenger or the most harsh per passenger, per sector. Ryanair has more than doubled it’s credit card charge in less than two years.

Air France (UK) – £4 per passenger per booking.

Air New Zealand – No credit card charge.

Air Southwest – £6.00/€8 per booking on credit card, £1.00/€1.30 on debit card.

bmi – £4 per person on credit card, no charge with debit cards.

British Airways- £4 per ticket on credit card, no debit card charge.

Brussels Airlines – No extra charge.

easyJet – 2.5%, minimum £3.50 on credit cards, £1.95 debit cards except Electron.

flythomascook – £2.50 per passenger, per sector for all except solo and Electron and Mastercard debit.

KLM (UK) -£4 credit card fee (all), zero debit card fee (all).

Jet2 – Solo and Electron free, credit cards 4.75% charge, min £4.99, debit cards 3% minimum £2.49.

Qantas – No extra charges.

Ryanair – £4.75 per passenger, per sector all cards except Electron.

Swiss International – No extra charges.

Virgin Atlantic – 1.3% credit card charge. No extra charge for debit card.

In all cases the charges stated above were taken from the UK version of the mentioned airline websites. Either for a test flight booking for travel in March or from the FAQ section of the website.

Virgin Atlantic has been proclaimed leading airline business brand.

That’s according to the results of  a superbrand survey which is decided by a panel of experts along with 1’500 individual business professionals that have either purchasing or managerial responsibility. The business brands are assessed on three separate criteria : quality, reliability and distinction. Below we have got the list of the airlines that appear in the survey. In brackets is the position of the brand in the overall survey.

1. VIRGIN ATLANTIC (25)

2. BRITISH AIRWAYS (36)

3. EMIRATES (68)

4. Singapore Airlines (78)

5. easyJet (308)

6. QATAR AIRWAYS (318)

7. BMI (413)

8. Swiss International (430)

Frequent Flyer Schemes -- Mileage Running

A mileage run is a trip designed specifically to earn miles or points from an airline frequent flyer programme. It may be possible in some circumstances to make enough “points” from flying on strange itineraries when the prices drop low enough to buy a much more expensive flight or holiday via the airlines frequent flyer milage scheme. More often though people will engage on a mileage run in order to go from one status level to another, e.g. from silver to gold and so get the extra benefits which could be complimentary lounge access.  The video below shows someone’s “milegae run” from 2006

Typically the milage runner will go for a multi-stop cheap trip at off peak travel time and perhaps not even visit the destination city. It’s a mad mad world, or is this only something that happens in the USA ? Would be interesting to get some comments on this. A couple of things have occurred to me:

1) From the airlines point of view this will mess up their data on what routes are popular and which aren’t. Probably not a problem though unless this activity is very widespread.

2) Environmental pressure groups must think this is awful. OK it’s not as bad as flybe paying passengers to fly or bmi flying empty flights to keep Heathrow slots

It has spawned a whole sub industry including popular forum websites and even travel agents that specialise in putting together itineraries that will maximise the points balance for the mileage runner. Detailed article on mile running from Wired.com