Getting It Wrong
There has to be another way. Enough people have commented on the recent meltdown at British Airways - about the 3rd or 4th since the introduction of the clearly flawed new airline management system (for want of a better expression) so I do not wish to waste any more time on that.
Legacy carriers are really struggling to find an answer to the low cost problem but to my mind, simply following a "me too" strategy is not the answer. So, are there other options? Yes, I believe there are. To begin, let's establish a few ground rules:
1. Legacy carriers are not point to point short haul operators. That needs to be recognised. Legacy carriers are responsible for moving people about the planet and encompass a range of complex connections; they do not simply fly from A to B and back again. Without the inter-connectivity offered by the legacy networks, a lot of travel and more specifically business travel, would simply not happen.
2. If you want a low cost operation, run a low cost operation. You cannot just take low cost ethics to a legacy operation and expect people to be happy.
3. Recognise that people travel with legacy airlines for a reason. Apart from the connectivity offered, customers respect and remain loyal to a brand; mainly because of what that brand offers and/ or stands for. Take away the reasons for following (any) brand, then you destroy that brand.
What options are there?
A low cost operation does not require a whole set of that operations' aircraft, crew and routes. A low cost option can easily be accommodated within a legacy aircraft - but it must be distinguishable. For example, British Airways tried "Go!". One could take, say, 10 rows of any aircraft and brand those rows with Go! headrests. Maybe even change the carpet and decor - even a cabin divider (all of which would a sight cheaper than new seats and what-not).
The low cost part of the operation could then be given it's own identity, with, say, a separate membership club where you pay, say, £50 to join, earn points which may then be redeemed for in-flight drinks or snacks (in the same way coffee outlets offer a free coffee after you have bought x number of drinks) - uncomplicated, easy to manage and no having to give away/ manage reward flights.
Rather than offering "the cheapest" and then nickel-and-dimeing passengers, turn it around. Offer an inclusive fare as base and then, suggest ways (in a millenial-friendly way) that clients may reduce the fare: "Hey! No bags? You can reduce your fare by £30 if only having a carry-on! Click here!" and/ or "Hey! You don't mind where you sit? You can reduce your fare by £6 by just letting us plonk you somewhere!" and so on.
Keep the mainstream brand on a separate website but advertise the cheaper offering (and booking) on a distinctly separate website: "Hey! Looking for something cheap and cheerful? Try our Go! cabin... click here". This makes it clear, that although on the same aircraft, the actual offering is radically different and so avoids damaging the mainstream brand.
Any low-cost part of any operation should carry its own merchandising and branding - maybe even its own departure area .... and make it a fun thing. What you are in for, must be made clear - bring your own food, you must check yourself in etc etc but just because you book steerage - you can still embrace an identity that is fun and does not create the social stratification that is causing growing resentment amongst passengers.
The mainstream brand may then still offer those benefits which passengers have come to expect at the same time, not making those that elect to choose the low-cost offering feel too bad about it - after all, they have their own membership club, they know what to expect and should be able to feel more relaxed about steerage.
... just a thought!