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European airlines get stingy
Wednesday, November 08, 2006

Many American fliers searching for better service have turned to European carriers for the perks -- such as free meals, alcohol and newspapers -- that have vanished from U.S. airlines. Now, the stinginess is moving across the ocean. P> Threatened by low-cost competition from the likes of Ryanair Holdings PLC and easyJet PLC, and running up against some of the financial concerns that have bedeviled the U.S. industry in the past five years, European airlines are increasingly looking to the nickel-and-dime tactics that have come to characterize service in the domestic U.S. And the areas that are seeing the deepest cuts are the very delights that Europe is best known for: food and drink.

Last month, Scandinavian Airlines System started giving passengers in intercontinental economy just one free alcoholic drink, compared with the previous policy of unlimited booze. SAS began charging for food and drink in its intra-Europe economy class last year. Earlier this year, British Airways PLC stopped serving full meals on flights that occur during midmorning or midafternoon. (There are snacks and drinks instead.) Austrian Airlines AG began charging last year for meals on economy flights under 2 1/2 hours (coffee, tea, water and a chocolate remain complimentary). Iberia SA, Spain's airline, has taken free meals out of the economy cabin on all short- and medium-haul flights. Aer Lingus Group PLC of Ireland now charges for food and drink on flights within Europe -- water, for instance, costs about $1.90. On the airline's trans-Atlantic flights, all alcoholic beverages now cost money.

Airlines are increasingly charging for other services, too. Taking a page from Ryanair, SAS this year started charging for large baggage checked by passengers flying within Sweden; skis are 100 Swedish krona, or about $14, for example. British Airways this year raised its surcharge for travelers within the U.K. who pay with credit cards (it's now GBP 3, up from GBP 2). Aer Lingus charges for newspapers on flights around Europe.

The policy shifts are irking some travelers, especially Americans who like a little pampering overseas. Shantanu Rana, a 30-year-old product manager for a research firm who lives in Jersey City, N.J., was surprised when, on a recent SAS flight between Copenhagen and Frankfurt, economy passengers were asked to pay for food and drink. "I didn't expect SAS to be nickel-and-diming like that," he says. "It's becoming a lot like the U.S. domestic carriers."

Cecilia Galluzzi, SAS Sweden's product manager for Europe, explains that the airline needed to cut some services in order to bring prices down, and that the majority of passengers surveyed favored low prices over expanded in-flight options.

The majority of changes are taking place within Europe, but they're being felt on more trans-Atlantic routes, too. As more airlines team up as members of alliances, U.S. and European airlines have been standardizing some of their offerings. The beefed-up alliances, coupled with the fact that U.S. airlines have added flights to Europe, also mean that a passenger who buys a ticket on a European airline could wind up on a U.S. carrier's plane instead. Delta Air Lines, for instance, increased its trans-Atlantic service 25 percent this September, compared with last. And because Delta has a code-share arrangement with Air France-KLM SA, passengers who purchase Air France coach tickets (and are expecting the carrier's unlimited booze) could end up on a Delta plane (where there's only one free alcoholic beverage per coach passenger).

All of this is happening as more travelers look to the skies to cross the short distances between countries in Europe. Since the European skies were deregulated in the late 1990s, the low-cost industry in Europe has grown from five carriers with 50 planes, to 50 low-cost carriers with about 350 aircraft, according to Chris Avery, a European airline analyst with J.P. Morgan.

The competition is good news for travelers, since it means that fares are falling: Earlier this year, for example, British Airways slashed many fares within Europe by up to 50 percent.

"In Europe, a la carte pricing has been a response to the new entrants in the market," says Chris Tarry, a European airline industry analyst. "As air travel is changing in Europe, it's getting much closer to what it is in the U.S. It's become much more mass market, much less elitist."

Paul Paflik, general manager of Austrian's Americas division, says that this increasing price competition was the reason his airline had to go to a paid food system. Nonetheless, he says that passengers didn't always like the airlines previous complimentary meals. "Now people have to pay, but the food is much larger, and is of high quality and quantity, so less people complain," he says.

Some European airlines, of course, continue to maintain high service standards. Upstarts Eos Airlines and MAXjet Airways have challenged mainline carriers over the past year, and as a result, high-end services across the Atlantic have gotten an injection. Air France continues to serve free champagne on all long-haul flights. And Lufthansa serves all meals free of charge, as long as the flight is long enough for a meal service.

Business-class services on the European carriers are also getting upgrades, as the competition to lure and retain the big spenders intensifies. Austrian, for example, has hired an in-flight chef to serve its business-class passengers on long-haul routes. The carrier has also introduced "Viennese coffee service" on its business class, which pairs a choice between 11 coffees with dessert. Swiss is running regional specialties in first and business class, and includes a dinner such as sea bream in Noilly Pratt sauce, followed by a "nidelzeltli parfait" for dessert (caramel specialty with spiced plums).

Still, some fliers say that service is slipping in business class, too. Thomas Amberg, who frequently flies Swiss' business-class, says the quality of the food has declined in recent years. "Business class food is what economy food used to be 15 years ago," says the 40-year-old financial analyst from Bassersdorf, Switz. "But it's still much superior to domestic first class in the U.S."

A Swiss spokeswoman said, "We continually monitor our in-flight food service, welcome customer feedback and take measures to improve our service accordingly based on input from our customers."

Some airlines are finding that their cost-cutting policies are sparking a consumer backlash. Swiss International Air Lines Ltd. tried charging for food on short flights in 2003. But last year the airline reversed its decision after some passengers complained. Sarah Klatt-Walsh, Swiss' head of product development and management, said the concept especially annoyed travelers flying economy class on business trips and passengers flying long distances from Asia and the Middle East. Now, all of its food is complimentary again.

Still, the new free food isn't always what it used to be. Before 2003, Swiss passengers used to get hot or cold meals on a tray on flights over about an hour and a half. A meal could include a salad and cold cuts, dessert and a warm roll. Now the free meal on that route is most often a cold sandwich.

The changes bother Kurt Renold, a 54-year-old hotel manager in Amsterdam, who flies on Swiss about once a month. He says that the new free food is a welcome improvement over the paid service, since he very rarely was willing to spend money on the in-flight food. However, he says that the quality of what is now served free can't compare with the meals he used to get on the carrier. "Now, it's tasteless sandwiches that are packaged to keep for days. The sandwiches used to be crispy and fresh and good," he says.

First published on November 8, 2006 at 12:00 am
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