The Travel Adviser: El Al is gambling for your business

By
August 2, 2009 11:16

The airline has decided to split its planes and somehow double its take.

4 minute read.



el al ben gurion 88 248

El Al plane 248, 88. (photo credit: Ariel Jerozolimski [file])

I like to gamble. Yes, I know it can become an addiction but it's only my vice. My favorite game is 21 or blackjack, as it's commonly known. It could be the numbers, perhaps the math, but personally I prefer to use my brain when gambling than simply purchasing a lottery ticket and waiting for Lady Luck. What I enjoy about blackjack is splitting pairs. Having two similar cards, say nines, invariably leads me to tell the dealer to split the pair and double my bet. I am not alone. El Al likes to gamble as well. The airline has decided to split its planes and somehow double its take. It works like this: On certain El Al flights to certain cities, initially in Europe, El Al will offer two levels of service - a full service airline and, poof-- a low-cost carrier. A part of the plane will be designed for stripped- down service. Want a drink, pay for it! Itching to see the latest Harry Potter film, pay for it! Planning on checking in a suitcase, pay for it! A little chilly on the flight, they'll rent you a blanket. Want to earn frequent flier miles? Forget about it! To digress, let me explain. In the airline industry, there are two types of companies. Legacy carriers, be they El Al or Continental or BA, offer a fully-fledged service. They offer the ability to check bags, receive food, accumulate miles and be served beverages. Part of the package they offer is also to watch movies and listen to music on a video system. You can fly inexpensively in economy class, far more comfortably in business class, or be pampered unconditionally in first class. Low Cost Carriers often have a completely different product. Southwest in the US or Ryan Air in Europe are two excellent, successful examples. Flying short routes, they offer inexpensive fares with little added value. Ryan Air is now proposing to charge customers to use their bathrooms. Personally, I'm in favor of these airlines. Some like JetBlue have an excellent reputation for service and have put the legacy carriers at risk. In fact, the legacy carriers should adopt many of their conditions. Change fees are modest and while the tickets are non refundable, they are good for one year. Moreover, most low-cost carriers are based on one-way fares. So El Al's position makes, at first, some sense. Its marketing mavens must have moved mountains to convince management that they had invented the wheel. In fact for their promotional flights to Rome, they've found a way to squeeze even more money from the customer. Didn't check in for your flight online? - Pay $5 at the airport. Want a specific seat, window, aisle or middle seat? - Pay $5. Checking-in a bag for your flight? - Pay $10. Sore neck? - A pillow will cost you $5. Even listening to music will cost you $2.50 And of course the ticket is 100% non-refundable, with no ability to change it. Use it or lose it, as we say in our jargon. They're calling this service "Economy Basic." I call it Economy Blasé. The bottom line is that El Al is risking its brand name. Keep in mind that El Al has a charter company in its arsenal called Sun Dor. It flies under the El Al flag to dozens of cities in Europe, competing with Arkia and Israir. Passengers enjoy inexpensive fares and can even earn frequent flier miles. So why would El Al try to split its plane into two if it already has a low-cost carrier? Won't you feel a wee bit embarrassed to get your meal and see the passenger next to you forking over $5 for a sandwich? Won't you feel even more concerned when that same passenger pulls out a ham and cheese sandwich rather than paying for a meal? These are difficult times in the airline industry; revenues are down across the world over 20%. Airlines are scrambling to cut costs and to cancel non-profitable routes, as they should. But when El Al tries to water down her product, she's entering uncharted waters. Passengers fly El Al for a myriad of reasons. Some elect to fly for the frequent flier miles. Others choose her because of the unparalleled level of security she offers. Departing from Tel Aviv, El Al flies non-stop to more cities than any other airline. So why risk denigrating that good name? It would be far wiser for El Al to keep her cards close to its chest and try out this new twist using its charter company. Sun Dor is El Al's low-cost carrier. Staffed with El Al pilots, El Al personnel and El Al security, it seems the perfect vehicle to create a low-cost carrier. Maximizing a plane's capacity is a tricky endeavor. Wooing clients with different fares, better seats, fancier entertainment systems, more frequent flier miles is the smart way to go. But splitting your plane and your product just doesn't seem right. Because, as most intelligent gamblers know, the house always wins in the end. And in this case, the house is the flying passenger. Mark Feldman is the CEO of Ziontours, Jerusalem. For questions and comments email him at mark.feldman@ziontours.co.il


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