The Atlantic Update – Wednesday 7 March 2018

The Atlantic Update is published every Wednesday morning at 06:00 GMT, providing a weekly bulletin on developments on transatlantic travel between Europe and North America.

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BA World Traveller cabin on LGW based Boeing 777 aircraft
BA World Traveller cabin on LGW based Boeing 777 aircraft (Image Credit: British Airways)

Hello and welcome to the The Atlantic Update, providing a weekly bulletin on developments on transatlantic travel between Europe and North America. The Atlantic Update is published every Wednesday morning at 06:00 GMT.

US East Coast Weather

Due to severe weather expected on the US East Coast on Wednesday 7 March, a number of transatlantic flights have been cancelled or delayed.

At the time of writing, BA and Virgin have cancelled some flights from London to Boston and New York. Some flights also have revised departure times.

Airlines have implemented flexible rebooking policies, typically allowing those due to travel on Wednesday 7 and Thursday 8 March to move their flights to an alternative date up to Sunday 11 March.

Doubts over UK-US Open Skies?

There has been considerable media coverage this week over the scope of a prospective UK-US Open Skies agreement after the UK leaves the European Union in March 2019, subject to a transition period.

To give a bit of context, 10 years ago this month an Open Skies agreement between the EU and the US came into force. This allowed EU and US airlines to fly anywhere between the EU and US. In the UK, this replaced a treaty known as Bermuda II which at the time limited access to Heathrow to American Airlines, BA, United Airlines and Virgin Atlantic.

The Financial Times caused alarm earlier this week suggesting negotiators in Washington were playing hardball with the UK. Specifically, they would require “substantial ownership and effective control” of airlines to rest with either UK or US nationals in order to have flying rights between the UK and US.

The difficulty is that British Airways is now part of International Airlines Group, following the merger of BA and Iberia in January 2011. However, in anticipation of issues surrounding international traffic rights BA remains a UK airline with a UK-issued Air Operating Certificate. Furthermore, IAG only owns 49.9% of the voting rights of BA, with the remainder held by a trust to preserve BA’s flying rights under bilateral treaties which require majority UK ownership.

Virgin Atlantic is currently 51% by Sir Richard Branson’s Virgin Group with a 49% share held by Delta. Sir Richard is to sell a 31% stake to Air France KLM this year. However, at the time of the announcement, Virgin did say the transaction would preserve Virgin Atlantic’s UK flying rights.

The Financial Times suggests that the US is playing hardball in negotiations. This should not be surprising. At the time the EU-US Open Skies agreement was negotiated, the US did not do anything to relax its own ownership laws or to open up the US domestic market to international airlines. This was much to the frustration of Virgin in particular which had just set up Virgin America and faced a considerable lobbying effort from competitors and had to change its structure before launch.

These concerns were confidently dismissed by IAG CEO Willie Walsh in characteristically blunt fashion at the Airlines for Europe conference. No doubt an agreement will be reached, but at unnecessary expense and uncertainty for airlines.

Norwegian London Gatwick Summer Schedules

Norwegian has confirmed its summer transatlantic schedule for London Gatwick.

Using the PR trick of “150,000 extra seats” (across a six month period it’s not that much), it will operate increased frequencies on the following routes from Sunday 25 March:

London Gatwick – Boston – From 4 to 7 weekly
London Gatwick – Fort Lauderdale – From 2 to 3 weekly
London Gatwick – Los Angeles – From 7 to 11 weekly
London Gatwick – Oakland – From 5 to 6 weekly
London Gatwick – Orlando – From 2 to 3 weekly

BA’s “densified” Boeing 777 is here

BA has released images of its “densified Boeing 777” which will operate on select transatlantic routes from Gatwick from later this year.

Basic Economy Becomes Mainstream

American Airlines and British Airways confirmed the launch of a Basic Economy fare last week. The fare excludes checked luggage and seat selection.

The exact launch date and the routes on which they will be available have not yet been confirmed.

Whilst this was expected, it’s not helpful that airlines within the same group are offering different basic economy products.

For example, Aer Lingus launched a transatlantic saver fare last year, which does not offer items such as headphones and blankets in flights, but the BA basic economy fare does.

American Airlines and BA also have different offerings for frequent flyers. American offers free checked luggage for Oneworld Ruby/Sapphire/Emerald cardholders on basic economy fares, but BA doesn’t.

Also of note this week:

Construction starts next month a new rail link that will ultimately link Montréal-Trudeau airport with downtown Montreal. (Réseau Express Métropolitain)

Bloomberg on the terrible politics behind the plans for a new tunnel between New York and New Jersey. (Bloomberg)

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