Some businesses might be struggling but consultants seem to be thriving. Whilst there are some who know what they are doing and understand the field they work in, there are too many who seem to think the more they complicate an issue, the cleverer they will appear.
I am just recovering from reading a tedious report on the sale of slots at Gatwick by flybe to easyJet. Lots of graphs, charts and complicated theories as to the the precise strategies of flybe, Gatwick and easyJet almost completely hide the real reason for the sale.
- Flybe has been losing money badly for several years. They have now embarked on a turn-around plan which is, almost, their last chance. Gatwick was not central to their route network and if someone is going to offer £20 million for the slots, you grab the cash with both hands.
- Flybe blamed Gatwick’s discriminatory pricing which hits smaller aircraft but other airports discriminate in a similar way. The simple fact is that flybe badly needed the cash – though obviously they could not say that.
- You might have thought that Gatwick, with its stated ambitions to be a rival to Heathrow, would actually want to keep flybe because of the domestic feeder traffic, but economics come before lofty ambition. Even ignoring the money they receive from each take off and landing, Gatwick wanted bigger aircraft because bigger aircraft have more passengers and more passengers means more business for the shops. Also, international passengers spend more than domestic passengers. Gatwick could surely have done a deal with flybe had they wanted to but their departure suits them very well – the choice between 80 passengers going to Newcastle and 180 going to Athens is a no-brainer. The airport will gain a little from increased landing fees with the bigger aircraft but it stands to gain much more from the additional retail revenue.
Simple – no graphs or pie-charts required.
Airport retail is hugely important to all travellers. Those who complain about the crowds of shops disturbing airport terminals really need to consider how much their tickets would cost without the income. No passenger is forced to shop – but we all enjoy the benefits.
And Heathrow has just announced a very interesting new benefit – free wi-fi. Once again, the press manage to miss the point. Almost every story I have read on the subject says the airport will be offering 45 minutes free wi-fi use each day. Some then pontificate about the aim of Heathrow to appear to be offering more, but they ignores the crucial part of the deal. You can actually get 90 minutes each day – all you need do is enter your Heathrow Rewards card number. Linking the free wi-fi to their shopping reward card is a very clever move. Anyone using the free wi-fi is going to be tempted to sign up to get the extra minutes – and if they sign up, the airport will have their email address and be able to hit them with lots of profitable add-ons.
Airports and shopping – the two are inextricably linked.