Dubai-based Emirates is seriously considering offering passengers cheaper hand baggage only (HBO) fares.
The latter have proved popular with younger passengers and especially the millennials who tend to travel light.
In a recent airlineratings.com interview Emirates’ president Sir Tim Clark revealed that his airline will be reviewing its economy class with reference to product and pricing.
Part of the review concerns HBO tariffs. These originally appeared in Europe and were offered on short-haul routes. But the past few months have seen their introduction on long distance routes.
Airlines like to offer HBO fares because, costing less than regular fares, these tariffs gain the carrier a more competitive display in booking systems.
In the case of Emirates we see it already facing price competition from conventional airlines. Now it’s being challenged by low-cost long-haul air services.
Norwegian is flying into Dubai and Bangkok (from Scandinavia). Last year Norwegian launched non-stop service between London and Singapore (which competes with Emirates’ indirect offerings via Dubai).
One of Emirates’ largest passenger flows is on the multiple routings between North America and India.
From later this year it will be facing competition from Icelandic low-cost carrier Wow Air (operating via Reykjavik) between North America and Delhi.
Wow Air is truly a no-frills carrier. It prices cheaply because its base fare comes without the sort of extras travellers used to take for granted even with a LCC. For example, Wow Air charges extra for hand luggage. Only one small item (like a briefcase) is free of charge.
Quoted by airlineratings Sir Tim Clark said, “We have many, many passengers who travel great distances with just a backpack.”
A good example is “with the software engineering living in Seattle, working for Amazon, who just wants to fly home to Hyderabad to visit his family for three days.”
“He just comes on board with a small backpack – no more.”
Says India’s aviation author Vinamra Longani, “The European carriers switched to [long-haul] HBO fares because of competition from long-haul low-cost carriers [LCCs].”
“The Gulf carriers are essentially ‘long-haul LCCs’ and they [as they mature] need to bring in extra revenue in order to survive.”
Besides their introduction on long-haul routes, Longani also sees them “proving popular on shorter hops such as within the Gulf/MidEast region and between the Gulf and India.”
If Emirates were to go down the HBO route (and it will surely happen should it decide to introduce a ‘light’ tariff) we can expect its local rivals Etihad and Qatar Airways to follow suit (despite what they might say publicly).