If you’re going to enter a competive market, offer something cheaper, something better, and if possible, both. In retrospect upstart airline La Compagnie brought a knife to a gun fight. For those that don’t know, La Compagnie is a relatively new, independent airline run by many former British Airways executives. The airline features an all business class cabin and its aim is to undercut traditional business class pricing, while offering a business class experience. Since most positive airline revenue is generated in premium cabins from the US to Europe and vice versa, it seemed like a great idea, kind of.
Lowering the prices on business class to Europe is a sound concept and truly had me considering throwing my business their way this summer. If La Compagnie doubled that fighting notion with a superior product, it could have been an early round summer knockout. In actuality, La Compagnie offers only an angled flat product, no frequent flier miles, no guaranteed aisle access and a lack of brand recognition and trust, which these days, is paramount. Flat beds and aisles are a standard feature for most business products across the pond, so why would you ever enter with something inferior? Will La Compagnie still be around in September? With what One World and British Airways have launched on them, who knows.
What contenders fail to realize is that taking a loss or breaking even on one of 1,000 routes is a drop in the bucket for a major airline. I would be shocked if One World or British Airways actually was taking a loss at all on this route, but even if they are, they have plenty of others generating huge premiums. To nip La Compagnie in the bud, British Airways and One World partners matched La Compagnie’s fantastic $1,700 pricing from the US to Europe. What happened next, no one would have expected. When savvy travelers picked up on the AARP discount, offering a further $400 off of their already low matching price point, demand surged. In my opinion, anyone who was intrigued at $1,700 from either airline, was instantly sold at $1,299 (less with a BA card discount) from British Airways, American and One World. A drop in the bucket to them, a body blow to La Compagnie.
I attempted to reach La Compagnie about their product, long before this war broke out of intrigue and genuine interest. After weeks of radio silence (being ignored) from their US department, I got a half assed response from the French side. I don’t in any way think I am an important person, in fact my wife reminds me every day that I am not, however, I do feel that when someone is interested in your brand, you should respond and help spread the notion. Every major airline manages to respond to my questions at some point.
Nice try La Compagnie. If you’d like to respond, I’d be happy to try your product, for free now.
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