Passengers' Experience of Air Travel (HC 435-ii) Transport Committee 25 April 2007

Q251 Mr. Eric Martlew: Is there a size restriction? [on hand luggage on EasyJet aircraft]

Mr Nicol: Yes, for on-board. The overhead bins are restricted by physical capacity, not by the weight. You can take a significant weight.

Q252 Mr. Eric Martlew: If you are taking gold it would be fairly heavy.

Mr Nicol: Exactly.

Q253 Mr. Eric Martlew: There is still a restriction on what you can take on board.

Mr Nicol: Exactly, because otherwise people would be taking on, literally, the kitchen sink. The hand baggage is restricted. We do not charge for the first hand baggage but what we introduced after the August security issue - and you may recall it was essentially what people were taking on-board aircraft - we started charging for the second bag, £5 to take a second bag on board, essentially simply to incentivise people not to take a second bag because it is easier for airport systems to cope with one 20 kilogram bag than two ten kilogram bags in the airport baggage systems themselves.

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Q262 Mr. Eric Martlew: First, Mr French, you have indicated that you are not happy with what you consider is the monopoly situation of BAA. Do you think it should be broken up?

Mr French: I do believe so, yes, because we fly from Gatwick, Southampton, Glasgow, Edinburgh, Aberdeen and I think competition between these airports would be quite different. I cite Southampton as a classic example, the financial constraints on the economic returns of the British Airport Authority - or BAA as it is now known - applied to the management of Southampton are the same as those of the corporate bigger company. They are quite different from most other regional airports and therefore the costs are different.

Q263 Mr. Eric Martlew: Mr Nicol, do you not want to upset them?

Mr Nicol: No, anything but, there are not many people in the airline industry who do not mind putting the boot into BAA occasionally and there is not a huge amount of love lost between the various organisations. We operate from six out of seven BAA airports plus Naples in Southern Italy, including the two principal London airports of Gatwick and Stansted. To us it is not a question of ownership. You could, for example, break up BAA and say, "Okay you have got to sell Gatwick or you have got to sell Stansted". These are mini monopolies in their own right, and certainly in the case of Heathrow very, very big monopolies. The issue which we are much more interested in is that of price regulation. The worst thing would be to take a monopoly airport system and break it into three little mini monopolies so they can go off and charge what they want. Gatwick is full, Stansted is full and Heathrow is full as well. They would all have local monopoly pricing power. What we say is ownership is secondary to ensuring that customers come first in those places rather BAA's Spanish shareholders.

Q264 Mr. Eric Martlew: Landing charges have got to be regulated?

Mr Nicol: Correct. We would very, very strongly urge that. Also it just stops BAA gaining the investment around the system. They may choose to under-invest in one airport in order to invest in another. It is about price regulation, undoubtedly, making sure the customers get the best deal.

Q265 Mr. Eric Martlew: The title of this inquiry is Passengers Experience of Air Travel, is it not a fact that people's experience of air travel is a poor one and that every year it is getting worse?

Mr French: For the last ten years we have undertaken on-board customer market research of satisfaction and gradually it has been getting better all that time. I would say to you that customer satisfaction is higher than it has ever been, other than this issue of congestion at terminal buildings because it really does cause a lot of stress to passengers. I think, also, the uncertainties over what they can and cannot take on-board cause a lot of stress to customers. On the whole, I would say the customer experience is very good. In our own instance we provide a lot of service, our business would not be doubling in size if it was not good. The issue I think is more to do with the ground than in the air.

Q266 Mr. Eric Martlew: Can I press you on this because basically my view is I fly because it is convenient, I fly when there is no alternative. I would not, for example, fly to Paris, I would get the Eurostar which is better, so that is why people use your aircraft, they fly because it is convenient and quick. It is not because they enjoy the experience, it is not because they enjoy running around trying to get a seat or whatever, I am not sure whether you do that. I think the general public out there will tolerate airlines and they accept what you say, that it is not just the journey it is the whole experience, it is getting to the airport, it is the cost of the airport food perhaps, it is getting off at the other side and your baggage has not arrived. People do not enjoy flying any more, do they, Mr French?

Mr French: Very few people fly for pleasure, most of them travel to get from A to B. Like you, I would never think of going from central London to Manchester or Birmingham, Paris or Brussels by air, I would always go by train. Why? Because it is very simple, you can get to the station six or seven minutes before and get on that train, it is a good experience. Conversely, as a regional airline, we operate around the country and we have competitor airports less than one hour's drive away from all of our airports; the customer has a choice. If we did not give a reasonably satisfactory standard of service we would lose our customer base.

Q267 Mr. Eric Martlew: Mr Nicol, what is your view?

Mr Nicol: The question was is it getting worse? No, I do not believe it is at all. We hear occasional horror stories. When there are issues relating to disruption last summer we hear an awful lot about that; when there is fog at Heathrow which substantially shuts down the air traffic we get to hear about that. What you do not hear about is that we will fly 38 million people this year and most of those people fly on time without any difficulties whatsoever. It may be that some people who are in city centres, going to city centres might say, "Okay, on balance I might choose to take the train" but what happens if you live in Milton Keynes or you live in Bedford, then our service from Luton to Paris suits you much better than going into London and getting on the Eurostar. The customer decides what they want to buy. If they did not want to buy our services they would not buy them.

Q268 Mr. Eric Martlew: My argument is they buy it because it is convenient. Nobody goes to an airport willingly saying, "This is going to be a good experience". They say, "Let's get it over with"!

Mr Nicol: I disagree. I honestly disagree. A weekly commute or daily commute for people, people may look at it slightly differently for those purposes but an awful lot of people that I know are going on holiday and the holiday begins when they get on the plane. "Great, I'll have a gin and tonic and relax, we're on our way". Yes, clearly they are taking the plane to get somewhere but that is part of the holiday experience.

Q269 Mr. Eric Martlew: I must admit when I have been to Stansted I have never felt that experience.

Mr Nicol: Come to Luton.

Q270 Mr. Eric Martlew: In my business it is called believing your own propaganda.

Mr Nicol: Come to Luton on a Friday afternoon and I will show you. I will show you people who enjoy the flying experience and are looking forward to the flight element of it, not just the A to B element.

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Q356 Mr. Eric Martlew: Firstly, can I come to the issue of security. One of the things you have both said that has concerned me is what you are really saying is my constituent who never goes abroad should actually pay for the security when there is a crisis for those who do travel, even though some of them may not be taxpayers in this country. Is that what I am getting from you?

Mr Want: No.

Q357 Mr. Eric Martlew: You do not think the passengers should pay?

Mr Want: What I have said, and what the BA position is, is that we should have a consistent view across Europe. I am quite happy that we pass it on to our customer as long as our competitors in Europe are behaving in a similar way and there is a common approach to it. We are quite happy for it to be transparent and passed through in a proper way but what we do not want is for there to be unfair support in other countries.

Mr Humphreys: I agree with that. We are often at a significant competitive disadvantage. The clearest example is probably the United States' airlines which over the years have received substantial subsidies to cover security.

Q358 Mr. Eric Martlew: Because they are subsidised regionally. That brings me to the point that you seem very keen on the EU taking over the security role for air transport. Is that a fair point? I would be very worried about letting the EU take over security.

Mr Want: I am not looking for the EU to take over but what I am looking for is that there are common standards across the EU and the UK Government, who work very closely with a number of the other organisations in Europe, should seek to ensure that there is a common approach. The British technology and the experience of people such as TRANSEC is exemplary and we need to push that through to ensure there are consistent standards.

Mr Humphreys: I agree with that.

Q359 Mr. Eric Martlew: There has been an implied criticism from all of our witnesses about the security arrangements, but there is a real threat. I live in Carlisle, 20 miles away from Lockerbie, and it happened, and if it happened again it would have a dramatic effect on your business. Are you not being a bit too critical of the airport authority?

Mr Humphreys: No, we are not criticising the security standards at all, it is simply the efficiency of applying those standards and the consistency of application.

Q360 Mr. Eric Martlew: Are you not wanting it both ways, you want fast passage but you want it secure and you want it tomorrow?

Mr Humphreys: But is that not what the passenger wants? If you can achieve a given level of security more quickly, why would you not want to do that?

Mr Want: My answer to you is you mentioned Lockerbie and the action that the UK took after Lockerbie was to develop whole baggage screening in a way that did not inconvenience the customer. Whole baggage screening was built into systems. It took a number of years but it meant there were no longer delays for the customer. What happened after 9/11 was because when the US had to react they put x-ray machines in place which caused delay and disruption. There is an argument that says that is the terrorist winning. What we did in the UK, which was to build it in properly in a robust manner, was the right way to ensure that you have proper security done in a proper way but in a way that does not inconvenience the customer. Most customers want security and they want it done efficiently, they get upset when they see long queues and it being done inefficiently.

Q361 Mr. Eric Martlew: We have a report coming out on that very soon. What passengers really want on long-haul is a comfortable trip. We are talking about the air passengers' experience and, to be honest, being in economy - despite what the press says MPs rarely get upgraded - is like being a battery hen, is it not? It is awful. That is the problem with long-haul.

Mr Humphreys: I am not sure I would agree with that. First of all, we provide an alternative. You get what you pay for basically. We could always provide a first class product to every passenger but the cost would be substantial. The seating arrangements at the back of the aeroplane are very much dictated by what the passenger is prepared to pay. We do provide an alternative, we have Premium Economy, and for a modest additional amount you get a much more comfortable seat, but at the end of the day it is a very price competitive business.

Q362 Chairman: I would not want to argue with you, Mr Humphreys, but if you look at the pricing structure, we have done some work on this and British Airways have got First Class, BA Club World, Virgin Upper Class, United Business and then there is World Traveller Plus and Premium Economy and then economy class. We looked at a flight on British Airways, we chose the date at random between 4 and 7 May, and we went on the website to compare prices for a return trip from London to New York, and British Airways were cheaper than you for a comparable class. Club World was £2,092 and you were £2,100. United Airlines were £2,040. When we looked at some of the others, British Airways' World Travel Plus was £725 and you were £982. Are your pricing policies totally clear and understandable?

Mr Humphreys: I think they are. If you had gone for different days, different routes, you might have got a very different picture.

Q363 Chairman: I am just saying this was a random choice, on a random route, it happened to be a transatlantic route that a lot of people would use.

Mr Humphreys: Prices change all the time and we react to market forces. I might say that our products are so superior that we can charge a few extra pounds, but I am not sure that is always true.

Q364 Chairman: I am going to ask Mr Want a slightly different thing about Premium Economy and World Traveller Plus. They are twice the cost of the normal economy seat. What do I get for twice the price of the economy ticket?

Mr Want: You get additional space around your seat and some other benefits at check-in and additional hand baggage allowance.

Q365 Mr. Eric Martlew: Can I come back on that. Are you convinced that in economy, and the vast majority of people travel economy, especially if they pay for it themselves, you are not damaging people's health? We now have this video on DVT which tells you that you should get up and walk about but there is rarely space to get up and walk about because of the threat of the congestion in the seats being so close together. That is especially on long-haul. I can understand it if you are going two hours into Europe perhaps. Are you not taking it to extremes?

Mr Humphreys: I do not think we are. Certainly our seats are nowhere near as tightly packed as some other airlines, especially the charter carriers, for example, on long-haul. The health element was at one stage exaggerated and a great deal of research has gone into it. We take every possible precaution in terms of the advice given to passengers about drinking water, moving around and so forth. I have to come back to the point I made before that this is a very price sensitive market. If we decided tomorrow to give every passenger another three or four inches of leg room we would not have any passengers on our aeroplanes because we would have to increase prices to such an extent they would all fly with British Airways or United.

Mr Want: On the health issue, no, we do not believe that we are putting people at risk. Since the issue of DVT came to the fore we have done a lot of work with many of the government agencies, with the CAA and the aviation medical people to ensure that we are doing things in an appropriate manner. We have worked with the airports with that and will support everything we can on that.

Q366 Mr. Eric Martlew: I do accept that you are not the worst culprits but do you think it would be advisable if you could limit the space, that there should be a minimum space between the two?

Mr Humphreys: There is a minimum space.

Q367 Mr. Eric Martlew: Is it too close together?

Mr Humphreys: The CAA sets a minimum space.

Q368 Mr. Eric Martlew: You think they have got it wrong, do you, because you are going over that?

Mr Humphreys: No. They set it according to safety criteria in terms of the evacuating the aeroplane in a certain time period. We provide what we believe is a very competitive market and our survey figures show that our passengers are highly pleased with the product at a competitive price.

Q369 Mr. Eric Martlew: So you actually go beyond the standard that is set?

Mr Humphreys: Yes. From memory, I might be wrong about this, it is a 29 inch pitch that is the minimum and ours is significantly more than that.

Mr Want: Ours would be the same. It would depend on the aircraft and the layout of the aircraft. Overall we are confident that we are delivering what is required to ensure safe passage.

Q370 Chairman: It does not say that on your website. When you check-in it does not give you seat pitch.

Mr Want: It will change between seat rows depending on where the actual seat is on the aircraft as well. There are different configs around the bulkheads and ---

Q371 Chairman: I know all of that. I am saying that since you are so full of information, is it possible for me to work out the seat pitch when I go on to book my seat?

Mr Humphreys: I do not know.

Mr Want: I do not know.

Q372 Chairman: You had better go away and tell me.

Mr Want: I will.

Mr Humphreys: The information is published but I do not know about the website.

Chairman: When in a hole stop digging, Mr Humphreys.

Q373 Mr. Eric Martlew: A final question for you: looking to the future, and you are all talking about it being very price sensitive and you seem fairly happy that you are one of the low-cost airlines on the long-haul, is the travelling experience going to get better or worse?

Mr Humphreys: In our experience the passenger experience on board the aeroplane has consistently got better as years have gone on. The problem the passenger faces today is more related to what happens on the ground rather than in the air for all the reasons we have talked about already. That is the major problem.

Mr Want: We believe that Terminal 5 will be a step change in the passenger experience. It is a modern terminal which has thought about the customer, it has thought about giving time back to the customer to allow you to flow through to take a lot of the hassle and the stress out of that process. It is setting new standards and if the airport authority get permission to build Heathrow East it can continue across the airport. Heathrow is supposed to be one of the major airports of Europe and at the moment the standards are not, the terminals are outdated and overcrowded. Terminal 5 gives us a chance to start moving forward in a proper way.

Q374 Mr. Eric Martlew: That is fine, Mr Want, but the vast majority of my constituents would probably travel from airports other than Heathrow, what is happening there?

Mr Want: There is ongoing development. Our primary airport is Gatwick and the Scottish airports and Manchester and we continue to work with the authorities to build it, but Heathrow has got so far behind because it is so congested that we need to get that airport back up to its international status where it should be.

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Q380 Mr. Eric Martlew: Just on that, I can understand why you would not want to sell a slot at Heathrow but you may send the plane somewhere else. Is that true?

Mr Want: We may, but that is not our intention at the moment. We are keen to hold the operation as it is. As you know, we are very supportive of the third runway at Heathrow which would be a short runway which would allow domestics and short European flights to continue to operate into Heathrow as the ongoing pressures continue on the runways at Heathrow.

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Q428 Mr. Eric Martlew: What experience tells us is that when airlines go bust they create problems for all over the world. Does it not say something to make sure that ---

Mr Hunt: Corner shops go bust, technology organisations go bust. I spent 20 years of my career working in technology and more technology companies go bust every week than airlines go bust in a decade.

Q429 Mr. Eric Martlew: It does not create the same problem, does it, if you have got people whose holidays have been spoiled and thousands of pounds lost because your company - not your company, I am sure it is a good company - goes bust. You must accept that there have been bad experiences.

Mr Hunt: I am not disagreeing with you, but if I walk into a car dealership and buy a car, pay a deposit and the car dealer goes bust, do I ever get that deposit back? No. I am not disagreeing with you that there should be consumer protection.

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Q467 Mr. Eric Martlew: You have been a contrast to our other witnesses today.

Mr Hunt: Unfortunately, I missed that.

Q468 Mr. Eric Martlew: Who seem to think the problems are outside the airports and they have nothing to do with them. You are saying you have looked at the flying experience as run by the traditional airlines and it is rubbish and you have decided that is where the market is.

Mr Hunt: Yes.

Q469 Mr. Eric Martlew: In time we will see whether it works or not. You have said you have only been operating since January and I can understand why the Government may not want to take on more immigration people even if you pay because you may not be there next year.

Mr Hunt: With respect, Luton Airport has been asking for that, it is not just us.

Q470 Mr. Eric Martlew: Where are you picking your customers from? Are they people who would normally travel economy but would like extra comfort and have had a bad travelling experience or business people who are just trying to save money?

Mr Hunt: It is a whole mixture. It is business people who have had bad experiences, it is economy passengers who want a bit more luxury, it is Premium Economy, which is the new cabin passengers, who are paying £1,200, £1,300, £1,400 and they are getting a world class Business Class service from us. It is leisure passengers, business travellers, corporate, small and medium-sized businesses. To hone that down a bit, predominantly our passengers are small and medium-sized companies who cannot afford a £4,500 ticket but need a Business Class experience because they have intense work schedules and they have to sleep on the aircraft. We have picked up a huge number of leisure travellers who are trading up and want to treat themselves to a nice experience.

Q471 Mr. Eric Martlew: The standards that you offer, are they the same as, say, Virgin Atlantic?

Mr Hunt: Yes.

Q472 Mr. Eric Martlew: Would they say that?

Mr Hunt: No.

Q473 Mr. Eric Martlew: Just for the record, there is someone shaking their head behind you.

Mr Hunt: I am sure that is true. They have spent substantially more than we have.

Q474 Mr. Eric Martlew: Obviously you are operating from Luton Airport and you go into Newark but can you see yourself expanding or the formula you are using being copied by others because of the standards at the moment?

Mr Hunt: There were a lot of sceptical people about whether the all-Business Class model was going to work or is going. We have two US competitors who launched about 15 months ahead of us, both doing extremely well. We have just doubled the capital in our business by raising more money from our shareholders because they believe it is doing extremely well. We are the first airline in history to reach 60 per cent load factor in our second month of operation and the product will speak for itself.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

On behalf of Eric Martlew, 3 Chatsworth Square Carlisle Cumbria CA1 1HB