Christmas Greetings from the world’s airlines

As is customary for this time of year, many of the world’s airlines have produced films to share the spirit of the Christmas / Festive / Holiday (delete as appropriate!) season and mark the end of a year of travelling in 2014.

Here are a few films that caught our attention. A clear leitmotif is what airlines are fundamentally about: bringing people together.

Air Canada – The Gift Of Home For The Holidays

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A Merry Christmas and a Happy New Year to all our readers!

We would like to take the opportunity to wish all our readers a Merry Christmas and a prosperous and successful 2015.

Our site is steadily growing in readership and we’re very grateful to our readership for supporting us.

The world of air travel is never uneventful and we’re sure there’ll be lots to review and comment on over the next 12 months!

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British Airways to reintroduce First Class on flights to Vancouver from Sunday 29 March 2015 and Cape Town, Las Vegas and Phoenix from 25 October 2015

A few months ago it was announced that BA would stop offering first class on flights to Cape Town (selected flights only) and Las Vegas, Phoenix and Vancouver.

The reason for this was that even though the flights continue to operate with a four class Boeing 747 aircraft, these routes would be operated with aircraft that have not been fitted with the latest version of BA’s first class cabin.

Instead, BA would operate the old first class cabin as an extension of Club World business class.

As the airline continues to retire its older Boeing 747 aircraft, it is reintroducing first class on these routes with the assurance that all flights will operate with the latest first class cabin.

First class will return to Vancouver from Sunday 29 March. First class will return to Cape Town, Las Vegas and Phoenix from Sunday 25 October.

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What would British Airways parent International Airlines Group gain from buying Aer Lingus?

When International Airlines Group (“IAG”) was formed a little under four years ago from the merger of British Airways and Iberia, it stated an ambition to acquire up to 12 additional airlines.

So far it has acquired two. These are bmi and Vueling. bmi has been integrated into British Airways (bmibaby was closed and bmi regional was sold). Vueling continues to operate on a standalone basis.

Today we learned of an approach by IAG to Aer Lingus. IAG confirmed in a statement to the Stock Exchange that it submitted a proposal to make an offer for Aer Lingus, which has been rejected by the Board of Aer Lingus. Aer Lingus also acknowledged the approach, stating that the initial approach was preliminary, highly conditional and non-binding. Furthermore, in their view it under-valued the company.

What would IAG gain from buying Aer Lingus and why is it bidding now?

Aer Lingus is the fourth largest airline at London Heathrow with 3.1% of the airport’s departure and arrival slots. Acquiring Aer Lingus would give IAG member airlines nearly 56% of departure and arrival slots.

From London Heathrow, Aer Lingus flies to Belfast and Dublin (as does British Airways) and Shannon and Cork.

Furthermore, Aer Lingus has been steadily growing a transatlantic hub at Dublin airport (albeit from a very small base) serving destinations such as Boston, New York and Chicago. The Dublin hub has the significant benefit of US immigration pre-clearance. Aer Lingus has also been upgrading its in flight product to include fully flat beds in business class and in-flight WiFi. It is now a very credible competitor on transatlantic routes with a hub that has significant advantages for transfer passengers over London Heathrow.

A recent investor update gives a useful overview of Aer Lingus’ business model.

Assuming IAG makes a further bid, here are some initial predictions as to what may happen and the impact on London Heathrow. We should emphasise that this is all purely speculative!

1. IAG will be required (in theory) to forfeit slots on overlapping routes

An acquisition by IAG of Aer Lingus would result on a diminution of competition on overlapping routes to Belfast and Dublin. There is clear precedent that for any acquisition to receive clearance from the competition authorities IAG would have to agree to forfeit London Heathrow slots to a willing entrant. However, based on the performance of Little Red on slots forfeited by IAG as a condition of its purchase of bmi, the chances of this happening are low.

2. Consolidation of overlapping Aer Lingus routes

Inevitably, there will be a consolidation of the Aer Lingus and British Airways schedules on overlapping routes to Belfast and Dublin.

There is precedent from the merger between BA and Iberia for a route to be shared between the airlines with scheduling timed to maximise efficiency by eliminating “night stops” where aircraft and crews stay away from their home base overnight (thus reducing aircraft utilisation). This is the case for London Heathrow – Madrid. Alternatively, one route could be taken over by one airline. This is the case for London Heathrow – Barcelona.

3. Reallocation of Aer Lingus’ London Heathrow slots between IAG member airlines

There may also be an allocation of some of Aer Lingus’ London Heathrow slots to other IAG member airlines, principally British Airways. However, we do not foresee a wholesale slot-stripping exercise. There will be considerable political pressure from the Irish Government (a major shareholder in Aer Lingus) to maintain links between London and Ireland.

Furthermore, the most valuable slots to British Airways are early morning arrival slots between 5 and 8am which are well suited for long-haul routes. Aer Lingus does not have any such slots. Considerable efficiencies can be gained simply by reallocating slots to optimise existing schedules.

4. Aer Lingus is likely to join the Oneworld alliance and the transatlantic joint-venture with British Airways, American Airlines and US Airways

Aer Lingus left the Oneworld alliance in 2007 and has since pursued an “alliance neutral” strategy of co-operation with a range of partners such as Etihad (which holds a small shareholding in the airline), United Airlines and KLM.

It seems inevitable that Aer Lingus will join the Oneworld alliance and the transatlantic joint-venture with British Airways, American Airlines and US Airways and others.

This would give Aer Lingus a significant boost from the marketing and distribution network of its joint-venture partners and access to their corporate accounts.

Aer Lingus may end codeshare agreements with non Oneworld alliance member airlines. This could be detrimental to airlines such as United Airlines and Air Canada that codeshare with Aer Lingus and receive connecting passengers from Aer Lingus. This is particularly because these airlines have also lost transfer passengers from bmi.

5. Aer Lingus will gain efficiencies from IAG and co-operation with its member airlines.

There will be scope to generate significant efficiencies from merging back office functions with IAG and common procurement with IAG member airlines. IAG has recently announced a programme to standardise deliveries of new Airbus short-haul aircraft to the route which allows short-haul aircraft to be switched between member airlines in a week or less. Aer Lingus would no doubt gain from such a programme.

Whilst Aer Lingus has a long track record of co-operation with British Airways, it has much less so with Iberia and Vueling. There will no doubt be scope to increase co-ordination on routes from Dublin and from Iberia and Vueling’s hubs in Madrid and Barcelona respectively.

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Iberia launches twice daily flights from London Gatwick to Madrid from Sunday 29 March 2015

Ever since the marriage of BA and Iberia a little under four years ago, we have often wondered why Iberia has not taken advantage of BA’s distribution and marketing to operate more flights from UK airports to its Madrid hub.

There have been short-lived flights from Glasgow to Madrid, but little more. Now, as part of a significant expansion of Iberia’s short-haul network (which includes the launch of flights from Manchester and Edinburgh to Madrid), Iberia is to launch twice daily flights from London Gatwick to Madrid from Sunday 29 March 2015.

Flight IB3715 Depart London Gatwick 10:40 Arrive Madrid 13:55
Flight IB3717 Depart London Gatwick 19:35 Arrive Madrid 22:50

Flight IB3714 Depart Madrid 08:40 Arrive London Gatwick 10:00
Flight IB3716 Depart Madrid 17:45 Arrive London Gatwick 19:00

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British Airways launches new summer seasonal routes from London City airport to Mykonos and Santorini from June 2015

British Airways has launched two new routes from London City airport to the Greek islands of Mykonos and Santorini from June 2015.

Flights to Mykonos operate four times weekly from Monday 29 June to Sunday 6 September.

Flights to Santorini operate twice weekly from Tuesday 30 June to Friday 4 September.

BA also flies to Mykonos and Santorini on a summer seasonal basis from London Heathrow, enabling passengers to “mix and match” departure and arrival airports.

Flights are on sale now on ba.com and full timetable information is on BA’s trade website.

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Delta Air Lines opens a new arrivals lounge at London Heathrow Terminal 3

Delta Air Lines has today announced the opening of a new arrivals lounge for eligible passengers at London Heathrow Terminal 3.

This is a sign of Delta’s continued investment in the London Heathrow market.

The arrivals lounge is located in arrivals hall of Terminal 3.

Delta BusinessElite passengers and SkyMiles Diamond and Platinum Medallion members arriving from the United States have access to the lounge.

The lounge features 11 shower suites and clothes press and shoe shine services.

Breakfast includes Starbucks Coffee, fresh fruit, pastries, yoghurt and cereals and a prepared to order a la carte menu. Wi-Fi is available throughout the lounge, plus a business centre and a selection of the day’s newspapers.

The lounge is open from 6am to 2pm, daily.

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