glamour vs. pricing

Virgin

Flying in the lap of luxury seems to be becoming restricted to a lucky few.

In 2009 the IATA (the International Air Transport Association) stated that a large number of business passengers had chosen to switch to cheaper services, forgoing business class flights, often going for low cost airlines that in order to take advantage of this trend, have opted to attract and retain these new customers with specially developed products and services.

This change in habits has had very negative effects on the financial results of certain airlines. Business class is highly profitable for these companies and, according to IATA statistics, the income from premium tickets, a category comprising first and business class, fell by between 40 and 45% in May 2009 compared to the same month in 2008. This does not appear to be a cyclical downturn that is going to change in the near future.

Given this situation the luxury flight market provides good examples of strategies with excellent results. This is the case of Virgin Atlantic which earned pre-tax profits of 68.4 million pounds (77.9 million euros ) during the 2008 financial year (March 2008 to February 2009), compared to 34.8 million pounds (39.6 million euros) for 2007. Richard Branson attributed the result to the increase in passengers travelling in premium class and the “prudent” management of the airline.

One emerging resource making luxury flight services stand out is to offer special benefits that customers perceive as decisive in making their choice. Virgin has renamed its first class service as Class Suite, offering pre and post-flight beauty treatments from London’s Heathrow airport. Its Flying Club offers its VIP customers competitions with prizes such as Helicopter rides in the Grand Canyon or stays at Richard Branson’s Caribbean hideaway.
Sources:

http://www.lineasaereas.travel/2009/08/17/las-aerolineas-estudian-suprimir-la-clase-business/

http://www.trotamillas.es/4789/emirates-virgin-atlantic-lujo-por-los-aires/

http://www.cotizalia.com/cache/2009/05/26/noticias_62_virgin_atlantic_duplica_beneficio_antes_impuestos_hasta.html
http://www.radiocable.com/airbus380.html

http://www.abc.es/20090817/economia-empresas/aerolineas-estudian-suprimir-clase-20090817.html
http://www.revistaviajar.es/Brujula/Las-First-Class-mas-04-2006-2769.html

http://www.virgin-atlantic.com/en/us/whatsonboard/upperclass/cabin/index.jsp