Yet there are significant differences between the various business fare
classes. When you buy a business class ticket, the fare class will generally
indicate how flexible the ticket is and how much you paid for it. J and C
fare class codes mean you probably paid the full fare but your ticket is
very flexible and can be cancelled or changed without penalty. Tickets
showing D and I classes were probably discounted and are more restricted
when it comes to changes.
Prashanth Kuchibhotla, director of advisory services for the EMEA region at
American Express, told Times Online: “J fares fell by 20 to 25%. From the
first quarter to the second quarter of 2008, you could see that drop and
competition is obviously the number one reason.”
But, he says, average discounted business fares in the D and I classes on the
London-JFK route actually went up by 20% while those to Newark fell by 14%.
Although in tandem with this was a cut-back in the absolute number of
cheaper tickets.
“Carriers usually offer the same fare to both Newark and JFK from London but
the arrival of Continental on the Heathrow route changed it into a
competitive market because Newark is Continental’s hub.”
The rise in discounted fares at JFK can be put down to the termination of Eos
services, says Kuchibhotla. “If I were an airline wanting to match an Eos
fare, I would put [the competing fare] in D or I class. Once Eos
disappeared, the current incumbents did not have to compete at the low end.
That is why, in my opinion, there was a rise at the low end of business
class fares.”
Looking ahead, fares may be in for another rollercoaster ride. Virgin Atlantic
is taking off one of its Heathrow-JFK services this winter and Air India is
stopping flying on the route too, ending a 50-year heritage. If demand falls
dramatically, other carriers may be forced to follow suit.
“If an airline is going to take out a sixth or seventh flight in the day,
they are going to take it out in D and I class. As a result, people are
going to pay more.”
On the far horizon is the launch of BA’s innovative all-business service from
London City to New York, set to begin in autumn 2009.
Khubichotla says: “The service will provide a level of convenience that was
not there before. People will be prepared to pay a premium for that flight.”
On that basis, business class fares may be just as volatile as the stock
markets in the months to come.
