Orange smiles all round it would seem. Easyjet has been making some headway in the fight on driving yield on their flights. The average flight is yielding more and the orange crew seem to be beating the blue/yellow crew in this respect.
From the conference call 10 days ago, easyJet was able to report the following:
Ancillaries are up 22 percent, excluding baggage charges.
Baggage charges are up a whopping 62.3 percent.
Business travel accounts for just over 20 percent of revenue.
It is probably the latter that needs to catch the eye of the other low cost carriers, particularly Ryanair.
The take up of business travel can be attributed (and has been) to the availability in the global distribution system. And this is an important lesson for any LCC. While the GDSs may be an anathema, there is logic to providing a well established and simple tool which the TMCs and their corporate clients have access to.
I have made the point before that TMCs tend to be process driven and often at the expense of increased yield. EasyJet seems to be confirming this on the heels of improved yields by Southwest as a result of their reappearance in the GDS.
Lest anyone thinks the Professor has gone soft, I firmly believe that the LCCs need to get in front of the standard sources of booking for the corporate business. But the value of the GDS needs to be weighed carefully--unless of course you take the extreme view like Lufthansa and start charging for access to content.
Yield can be improved by increasing the footprint in front of the TMCs and the corporate travel departments. Ignore this group at your peril.
Cheers
Comments on this post
