Hand baggage-only fares: Rising overheads

30 Jan 2014 by GrahamSmith
Are hand baggage-only fares the future of short-haul travel, or will all the terms and conditions get in the way? Rose Dykins reports The introduction of hand baggage-only fares on European legacy airlines is a sign of the times, aimed at fending off competition from low-cost carriers (LCCs). “The big carriers are starting to fight back,” says Bob Atkinson, travel expert at travelsupermarket.com. “Short-haul routes have always caused them problems in terms of profitability, and the only way for them to make money is to introduce these fares that appear more affordable in order to match the LCCs.” While the concept of a hand baggage-only fare is simple enough – paying a cheaper price to travel without checked luggage – it is not being implemented in a consistent way across the airlines. If business travellers are to benefit from these fares, it’s important to look closely at each carrier’s individual policy, or risk being charged extra. Air France-KLM became the first of the full-service airlines to introduce hand baggage-only fares last year. The French carrier created a new hand baggage-only economy fare category called “Mini”, while the Dutch airline adopted the LCC model, making its entire intra-European economy network hand baggage-only, so checked luggage became an ancillary charge. September saw the launch of Swiss’s Geneva Economy Light fare, a hand baggage-only option available on flights to and from Geneva (with a few exceptions – see table below). Following trials on its short-haul routes to and from Gatwick airport, British Airways’ hand baggage-only fare was extended to the entire short-haul network in October. The airlines have said that the new fares aim to accommodate the changing travel habits of passengers. Last February, a KLM spokesperson told Dutch broadcaster NOS Television: “60 to 70 per cent of our European passengers only carry hand luggage. We know people would rather pay less for their tickets and that is why we are going to lower the price for flights.” When asked if Swiss planned to extend its Geneva Economy Light fare to the rest of its European network, Felix Rodel, Swiss’s country manager for the UK and Ireland, said: “It’s not something we’d pursue in the near future. But obviously with other carriers like BA going down that route, it’s something we would study.” BA’s hand baggage fares are typically £10 cheaper than its regular one-way economy tickets, with a £40 penalty fee slapped on if passengers have excess baggage upon arriving at the airport (£20 if they add a checked bag to their booking online). Robin Glover-Faure, BA’s head of short-haul, says: “This is about introducing more choice to customers and not penalising those who do not want to carry luggage. Those who choose a hand baggage fare will still receive the same great customer service, pre-allocated seats and complimentary catering.” Travelsupermarket’s Atkinson is positive about the airline’s new fare model. “British Airways has one of the best hand baggage allowances anyway [see table], plus you’d get away with duty-free shopping as well. If you’re savvy, you could pack for a week in Europe with that.” Jay Sorensen, president of Idea Works Company, an authority on airline revenue, is more sceptical. “I was surprised to see BA do this. Its approach was: ‘We can’t remove the checked baggage benefit from our economy class because that would make us too much like Easyjet.’ But there’s a reason why Easyjet does it that way – because it is the simplest way,” he says. When booking a return flight, you cannot select British Airways’ hand baggage fare for one leg of your journey and a regular fare for the other, which may not prove flexible enough for many business people. In addition, if you are travelling as a couple or small group, it is not possible for one passenger to book the hand baggage option while the other passengers do not – the bookings have to be made separately. When asked if BA had plans to iron out these issues, Glover-Faure said: “We constantly assess customer feedback and there may be some enhancements we want to make in the future.” Unlike BA, Swiss allows passengers to combine its hand baggage fare with a regular rate for different legs of a journey. Reception to the new fare type has been mixed. Some customers suspect that it is a clever way for carriers to disguise charging people more. VectorOne, a contributor to our online forum, writes: “This notion of ‘hand baggage only’ is nothing more than a cynical marketing ploy to generate more revenue, while supposedly offering an innovative product.” Fellow poster SimonS1 adds: “My suspicion is that over the course of a year or so, the airlines will bump the hand baggage fare up to where the lowest fare previously was, with the ‘luggage included’ fare moving higher.” BA says: “The standard fares have not [been] raised as part of this – they are as they were before we introduced hand baggage-only and we have no plans to put them up.” Swiss’s Rodel says: “Our offers are based on the current market situation and we will always maintain a competitive price with our Geneva Light fares.” Aside from the ambiguity over pricing, frequent flyers may not be entitled to their usual loyalty benefits if they go for a hand baggage-only ticket. BA Executive Club members earn Avios and tier points at the usual rate when travelling on the fare, and have the same lounge privileges. However, forum poster SwissExPat writes: “Being a BA gold cardholder, when I select the hand luggage-only fare I lose my two-bag allowance, which seems unfair. Why penalise the loyal customer?” With KLM, all economy passengers who are members of Flying Blue are exempt from the checked baggage fee. They can also continue to earn miles at the usual rate. But Air France passengers who travel on the Mini fare cannot accrue miles, regardless of their Flying Blue status. Elite and Elite Plus members can, however, check a bag in for free. Swiss’s Geneva Economy Light fare offers a similar benefit – Miles and More members and Star Alliance gold members can still check in one piece of luggage at no extra charge. “Senator or Hons Circle members always have the opportunity to check in one additional bag over the limit that the fare gives, so our members would expect the same [with the Geneva fare],” Rodel says. In addition, Miles and More members get the lounge access and mileage accrual they would usually experience. Could we eventually see hand baggage fares on long-haul flights? Atkinson says: “I recently flew back from New York with BA and there were plenty of people travelling with hand luggage only, so why not? The only thing is that it tends to drive more and more people to try to get the biggest bag on board that they possibly can, which inevitably results in congestion.” SimonS1 writes: “I can see the combination of hand baggage-only travellers and the ‘enhanced’ (ie, denser) seating that airlines are moving towards creating even bigger problems on board than there are now with insufficient locker space.” It could be that if the popularity of such fares accelerates the legacy carriers would have to introduce something similar to Easyjet’s “guaranteed baggage allowance”, in place since last July. If you travel on Easyjet with a bag smaller than 50cm x 40cm x 20cm you will be guaranteed to keep it with you on board, but if you stick to the pre-existing hand baggage allowance of 56cm x 45cm x 25cm, it may be checked in during busier flights to save space. If the same measure were to be introduced on long-haul services, passengers could risk being without their belongings for a considerable amount of time. For now, the carriers insist that space has not been an issue on short-haul flights. “BA’s hand baggage-only option is part of the fare ladder, so there will only be a finite number on any aircraft,” Glover-Faure says. Swiss’s Rodel says: “Roughly half a year on, it’s not something that’s been seen as a problem by our cabin crew and ground staff.” If you stay organised, follow the rules and know exactly what you are entitled to, you can avoid getting caught out by these fares. Atkinson says: “If you go away for a work trip and receive gifts, samples or documents from a business partner, you may arrive at the airport, find you’re over the allowance and get charged excess fees. If you fear you’ll be over the limit, don’t wait until you get to the airport – go online and pre-book that checked bag, as it will always be cheaper to do so.” Hand baggage graphic
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