By Ian McPartlan, Managing Consultant
Remember when airlines started taking away amenities from Economy class tickets to create a new Basic Economy fare class? Well, now the same thing’s happening in Business class, and Emirates is leading the way. The luxury airline recently announced that its unbundling business class fares to provide a ‘special’ or ‘H’ fare class, which many are calling Basic Business Class. Here’s a look at what the new fares entail and what it means for business travel managers.
Basic Business Class – What’s In and What’s Out
Traveling business class can be a luxurious experience, but this unbundled fare class removes many of the amenities business class travelers take for granted. With Basic Business Class, Emirates is offering travelers a business class seat at a reduced fare, but there are lots of restrictions that go along with that.
For example, there’s no limousine pickup and airport transfer. And, unless you have Elite status with the airline, you won’t get lounge access. Other restrictions include:
- No advance seat reservation till 48 hours before departure; travelers have to take their chances on seat availability
- Basic Business Class tickets are generally non-refundable, or there may be higher fees for ticket changes and cancellations
- Frequent flyer mileage accrual is reduced compared with typical business class fares
However, one of the attractive things about these fares is the significant savings over other fare classes – as much as 30% in some instances.
These no-frills business class fares aren’t yet widely available but are being released depending on market and route conditions. Currently, H class fares are available on selected routes from the UAE, Germany and the UK, but this could change at any time. You’re likely to see more of those fares where Emirates wants to stimulate business class demand or gain market share.
What This Means for Travel Managers
It’s important for travel managers to be aware of this trend. While there are lots of unbundled Economy fares in both the US and Europe, this is the first time unbundling is available in intercontinental business class fares.
In the economy cabin, especially in the US, some travel managers have blocked access to the most basic fare types via the online booking tool because of an unfavorable cost/benefit analysis. The feeling is the savings made aren’t worth the inconvenience to travelers of missing out on a seat assignment and a checked bag.
Savings ARE an important factor, of course. Where the difference between Economy classes may be a $10 or $20 saving, the figure is likely to be much more substantial on a business class fare. One caveat, though: savings vary by route and country, so you need to examine each route carefully to work out if it makes sense.
One of the best ways to do this is to crunch the numbers on your travel program to figure out:
- Where Basic Business Class is offered
- How this maps to your travel needs
- What the potential savings are
- The likely cost of paying for missing amenities, if they’re needed
- How likely you are change tickets at the last minute
You can also use predictive analytics, like the the Air Fare Predictor tool, to get transparency on availability and likely cost on the routes you use most. This can help you work out the potential savings and see where booking a particular route makes sense.
Basic Business Class: Beyond the Savings
When assessing whether to book this fare class, it’s also important to look beyond the savings. You need to consider the loss of amenities, because if your travelers use those amenities, losing them might cancel out the savings benefit.
For example, look at the behavior of your own travelers and your company’s travel culture. Limo transport sounds like a luxurious extra, but what if it’s a long journey to and from the airport, and being in a limo allows travelers time to work? And it’s the same with lounge access. It may be a welcome perk for some travelers, and an essential productivity tool for others.
Similarly, if you know there are often last-minute changes to business travel plans, non-refundable fares or those with a high change or cancellation fee may negate the initial savings you made. Finally, think about how this will be presented in your online booking tool. Most travel programs work with the lowest logical fare. The new Basic Business Class would fall into this band, but travelers booking what seems to be a regular business class ticket could be disappointed at the lack of amenities.
What to Do Next
Right now, this development is most important to travel managers who are already using Emirates as part of their travel program. That’s because it could have an immediate impact on the options available for your travelers But it’s also crucial for other travel managers to be aware of the trend, because just as Basic Economy spread across airlines, Basic Business Class may do the same.
Whether you’re using Emirates or not, it’s essential to think about how Basic Business Class will affect your travel program now, so you’ll have a strategy in place when other carriers eventually follow.