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Is value what the corporate travel market is looking for?

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carolinesaunders
carolinesaunders's picture
Is value what the corporate travel market is looking for?

With the development of Easyjet's corporate travel offering, is value what the corporate market is looking for?

Easyjet, of course, deal in short-haul flights and so value may take prominence over quality. A cheaper offering isn't always the second rate option, but how will Easyjet compete with other airlines that provide frequent flyer bonuses and other travel benefits within their programmes?

http://buyingbusinesstravel.com/news/1822056-easyjet-signs-deal-bcd-travel 

All comments welcome.

 

MarkM (not verified)
Anonymous's picture
Is value what the corporate travel market is looking for?

Hi Caroline,

It's a really good question, and the answer has to be yes.  A corporate is always looking for value but it’s not always perceived as cash.

The rise of the low cost carrier is certainly seen as a positive step by most and I think EasyJet have certainly set a trend in what other airlines are now trying to put in place.  For the corporate there are multiple things to take into account when deciding which airline to fly with and it doesn't always come down to cost.

When you look at an airline like EasyJet, they now have similar if not the same distribution channels as a legacy or scheduled carrier so that ticks one route to market in order to get closer to the corporate, the other aspect is the product offering.  EasyJet has been able to give the corporate all of the important elements of travelling with a scheduled airline that a corporate would expect including flexible fares, advanced online check-in, allocated seating, virtual boarding passes and they also offer a frequent flyer or loyalty scheme EasyJet Plus.

The important thing to remember is that the operating model offered by the likes of EasyJet is one that offers what appears to be choice to the traveller, you also need to consider do low cost airlines have as broad a reach on a particular journey.  What benefit is there to a traveller going from Scotland to London with EasyJet and then hopping onto a long haul with Virgin?  It may save some money but in the corporate world time is money so the real value is about seamless experience.

More, and more legacy carriers are seeing what the low cost carriers do as an opportunity to generate new revenue streams particulary on short haul routes, such as charges for baggage which is now the norm with KLM and selected British Airways domestic and European routes, charges for extra leg room and specified seating and no on board catering all of which increase the margins whereas before a traditional legacy carrier offered everything for one price even if you didn't need it.  

But why would a corporate still travel with a scheduled airline?  It’s all about perception and experience and I would ask the question does it always come down to price if the corporate has the choice of who to travel with.

In theory a trip from London to Glasgow same day return, travelling on a British Airways fare was typically paying for a bag, in-flight meal and allocated seat which they may not have needed, where as travelling EasyJet for example you can ditch the bag, you have a seat allocated free of charge upon checking in online or can pay for one of their choice and the ability to tailor the important elements of their travel based on need, thus reducing the cost.

Another great example is Lufthansa with the rise of their low cost carrier German Wings; clearly that model works well for them in providing a low cost provision in the European market and keeping the Lufthansa brand prestigious for the bigger money making long haul routes.

For the scheduled carrier you really need to assess what they do well and for the likes of British Airways what they do well is channelling passengers from around the UK and Europe into their hub at Heathrow and outwards to other destinations, really showing testament to their ability of being a good option for long haul.

With Easyjet, it’s simple if you want to go somewhere relatively close and do it on the cheap, brilliant option.

So as I see it, low cost great from A to B but the scheduled great from A to B to C to D.  Is there room for both, absolutely! 

Mark - Corporate Travel Account Manager

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