It took a few years but El Al finally discovered what so many other airlines before also know: An airline within an airline model almost never works. In this case the offering was Up!, the LCC that carried passengers between Israel and destinations in Cyprus, Germany, Ukraine, Hungary and the Czech Republic. Up! is shutting down and those markets will revert to “mainline” El Al service in Q2 2018.
The goal with Up! was to compete with LCCs like Ryanair and Wizz Air. El Al simply never got there on the cost side. And that should not be too surprising to anyone, least of all to the company insiders who knew what their operating costs were and what would be required to cut to the LCC levels. It was never going to work, but they tried anyways. And failed.
In some ways it is almost like the company didn’t try all that hard. The last press release on the Up! website is from 2015. The route map never grew beyond a handful of destinations.
The “good news” if there is any to take away from this shift is that El Al will now change over its regional operation completely rather than trying to target a handful of routes. The carrier will implement the unbundled fares across all of its European routes. At the base level no checked bags or advance seat assignments will be given. At the top end of the range checked bags and seat assignments are included, along with what the company describes as increased flexibility if a passenger wants to change flights.
Of course, that is good news to the airline as it almost certainly means more passengers will be paying more. Like the unbundled fares and Basic Economy offerings of every other airline the goal is to extract higher revenues from the passengers on average. And it mostly works. No reason to believe that El Al will be all that much less successful than the others with this approach.
Header image: Up! on the ground. By Anna Zvereva/Flickr via CC BY-SA
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Next thing you know, United will start “TED”, er, nevermind.
I’m a little sad they didn’t just call it “Al”.
To be fair, some have worked quite well, such as Jetstar for Qantas and Rouge for Air Canada.
I’ll give you “not awful” on those two. That said, Qantas/JetStar is shifting long-haul ops back towards Qantas again. Maybe Eurowings is also successful in that context, but hard to say for certain.
QF JQ only works because JQ actually has a lower cost base than VA and TT’s fleet is just too small.
United just has an airplane within an airplane…. basic economy
Yup. So do the other US carriers (and many outside the US market). It is a WAY more efficient and effective way to deliver the multiple products at various price points.
It only took the US majors how many failed airline-within-an-airlines to realize that? Some of them, like UA and DL, went down that path more than once.
I know DL had Song and Delta Express, but what did UA have besides Ted?
Joel Anderson Shuttle by United, a subfleet (kinda) on the west coast and the predecessor to Business1.
And there were also Metrojet (US) and Continental Lite.
Interesting, I thought Shuttle by UA was a Michael J. Graven – Interesting, I thought Shuttle by UA was similar to Business1 and not a separate carrier.
Joel Anderson it was. Ted wasn’t a separate carrier either — just a set of routes and a different set of metal.
Shuttle by United had a dedicated fleet of 737s, different on board service standards, different pay scales for the crews, Southwest style open seating in the main cabin, and was e-ticket only at a time when that was kind of a big deal. It was very much targeted as a Southwest competitor up and down the West Coast after Southwest made a big push into that region with it’s purchase of Morris Air.
Most (maybe all) of these former airlines within airlines flew on the main carrier’s operating certificate.
I wasn’t that familiar with the Shuttle by UA service operationally as I was probably drinking YX Kool-Aid (or at least eating their chocolate chip cookies) in that time period. From what I remember was it seemed to be very frequent service during the dot com boom, so I thought it was more of an operational name, like Business1.
I started increasing my familiarity with other carriers when I could no longer NRSA on YX from 8/2001 onwards.
Until this conversation, I’d totally forgotten that Business1 ever existed. It certainly didn’t last long.
Steven Sullivan I seem to remember it lasting until almost the CO merger… at least on the ORD routes.
The only one of its routes I ever flew with enough frequency to notice anything different was ORD-DCA, starting when we moved here in 2010. By that point, it certainly was gone, although DCA flights kept their prime position in the B gates at ORD. But, hot meals in F, newspapers, drink stations at the gates – all that stuff was gone by the time I was flying the route. Oddly, when we moved here, ORD-IAD got at least a cold plate on virtually every flight up front, but ORD-DCA was just the snack basket in F.
I thought it was through 2011-ish, so almost to the merger. Late 2009 they started phasing away the drink stations at the gates. I remember right after the merger was announced in 2010 a guy across the aisle from me, on an MSP-ORD, asked an FA if Smisek was going to kill business1 and send the MSP flights back to the C gates where they used to be.
What about the on-time guarantee and bonus miles from when they were late? That certainly wasn’t alive when I started flying DCA-ORD in 2010. There was never any mention of Business1 on those flights when I was on them.
It was definitely gone by the time Express took over some of the DCA freqs. I was on the first one of those by chance, but I’d have to dig into my twitter archive to find out when it was. I think we’re all a little bit right — Business1 died a slow death of a hundred little cuts.
The best thing about the DCA flight was its position right next to Frontera.
“Died a slow death of a hundred little cuts” – kind of fits most things United in the past 30 years.
Getting bonus miles on late flights was very hit or miss from when I started taking it (mid-2009).
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