Welcome to our Monday Briefing for the week beginning 22 October 2018, summarising the main developments in air travel over the past week.
Winter Is Coming (Part 1)
October is a cruel month for the airline industry.
The peak summer season is over. It is some months before most passengers think about booking their next holiday.
Flybe also issued a profit warning last week. The airline expects to make a loss of £12m this year, compared to market expectations of £3.5m.
City investors do not take kindly to surprises. Flybe was duly rewarded with a more than 50% fall in its share price to 14.30p. This compares to a price of 341p when it first floated on the stock exchange in 2010.
Consistent financial profitability has proved elusive for Flybe. It has banked its financial turnaround on downsizing its fleet. It is shedding larger Embraer E195 aircraft, a hangover from an over-ambitious aircraft order. This will make the Bombardier Q400 the backbone of its fleet.
It has also focused on providing connections to long-haul airlines at Heathrow and Manchester. It has taken up remedy slots for Aberdeen and Edinburgh at Heathrow and codeshares with many long-haul airlines. It has be said this is something that did not serve bmi well. The proportion of ticket revenue is small. There are significant operational issues in handling connecting passengers, such as dealing with mishandled baggage. Flybe also has ambitions to add many more regional routes at Heathrow if there is a third runway.
There is not a chance of IAG being Flybe’s saviour. When BA sold most of its former regional operation to Flybe in 2007, it acquired a 15% stake in the airline. It has since disposed of this. What had remained at BA became BA CityFlyer which has flourished at London City. Nor would IAG be interested in franchising the BA brand. BA cancelled its remaining UK franchise agreements with Loganair after bmi and easyJet acquired former franchisees BMed and GB Airways respectively in 2007.
International Airlines Group will also publish its 3rd quarter results this coming Friday. Whilst major announcements are likely to be reserved for the Capital Markets Day in November, IAG will inevitably be asked by analysts about the recent BA data breach.
Winter Is Coming (Part 2)
The Winter timetable starts this coming Sunday, 28 October. Here some of the main changes:
BA will fly direct from London Heathrow to Durban three times a week from Monday 29 October 2018.
BA will fly from London Heathrow to Marrakech four times a week Thursday – Sunday from 28 October 2018 until Saturday 30 March 2019,
BA will fly from London Heathrow to Moscow Sheremetyevo International Airport from 28 October 2018, replacing one existing flight to Moscow Domodedevo.
BA’s daily service from London Heathrow to Calgary is suspended from 28 October 2018 until Sunday 31 March 2019.
BA flights to Warsaw move from London Heathrow Terminal 3 to Terminal 5 from 28 October 2018.
In terms of major aircraft changes, BA Airbus A380 flights Heathrow to Boston and Chicago will end. Los Angeles goes from two Airbus A380 services a day, to one. Twice daily Airbus A380 flights to Johannesburg and daily Airbus A380 flights to Miami resume from 28 October 2018.
BA’s daily Airbus A380 service between Heathrow and Hong Kong will change from flights BA31 & BA32 to BA27 & BA28.
BA also adds a third daily Miami flight, operated with the Boeing 747, which will also replace an American Airlines Boeing 777-300. American Airlines will also add a fourth daily London Heathrow – Dallas Fort Worth flight.
BA also adds an additional four weekly flights to Johannesburg, operated with the Boeing 787. Virgin Atlantic also adds a second daily flight to Johannesburg.
CityJet’s service from London City to Dublin will operate under the Aer Lingus name from 28 October 2018.
Norwegian launches London Gatwick Tampa from Wednesday 1 November 2018. Norwegian also increases London Gatwick – New York JFK to three times daily from 28 October 2018.
Norwegian will also suspend Austin and Seattle for the winter. Chicago will reduce from daily to four times weekly. Boston and Fort Lauderdale increase to daily.
BA Ground Operations
For many years, BA has equipped its senior cabin crew with iPads to assist in dealing customer service issues on board aircraft.
The idea being that any issues with, for example, non-working in-flight entertainment, can be dealt with there and then and not left to fester.
A big problem at Heathrow in particular is that when there is mass disruption, often the most important activities such as rebooking passengers can only be done by a relatively small number of staff as ticketing has historically required many weeks of training.
BA announced last week that over the next 12 months Heathrow ground staff will be equipped with iPads and will be able to deal with any issues such as ticketing, reservations and lost baggage. The idea is that staff will roam the terminal and be on hand to proactively assist passengers.
It sounds encouraging. How it will change Heathrow remains to be seen. It’s also worth adding that any radical changes to Heathrow ground staff working practices would require approval from BA’s trade unions.
In case you missed it:
Ends at 23:59 BST tonight: £100 off BA long-haul economy flights for 5,000 Avios. (London Air Travel)
BA launches a summer seasonal route to Charleston. (London Air Travel)
BA scales back weekend seasonal routes at London Stansted. (London Air Travel)
Also of note this week:
Air France has reached agreement with unions representing cabin crew and ground staff – but not pilots – on pay. There will be another round of negotiations next year, where the new Air France KLM CEO is likely to want to secure a longer term agreement. (Air France KLM)
Virgin Atlantic introduces new catering in its Upper Class cabin and Clubhouse lounge. (Virgin Atlantic)
Late Post Publication Updates:
[Reserved for updates during the day.]
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