Monday Briefing – 28 January 2019

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Norwegian Boeing 787 aircraft.
Norwegian Boeing 787 aircraft (Image Credit: Norwegian)

Welcome to our Monday Briefing of the year for the week beginning 28 January 2019.

What’s Next For Norwegian?

Shortly before Norwegian began long-haul operations at London Gatwick, IAG CEO Willie Walsh spoke at a university business school event.

When asked about Norwegian’s plans for low cost long-haul, Wille Walsh was convinced that Norwegian’s approach wouldn’t work.

Whilst there may ultimately be a market for low cost long-haul, Norwegian’s approach was wrong. The Boeing 787 was the wrong aircraft. And Willie did not see the point of charging for meals on long-haul flights.

It’s not often that Willie Walsh admits to being wrong, but he has accepted that passengers have taken to the concept of low cost long-haul, at least when their flights are operating on time. IAG has of course launched its own low cost long-haul brand, LEVEL.

Last April, IAG announced it had acquired a stake in Norwegian with a view to acquiring the airline. After informal offers were rebuffed, IAG confirmed last week that it will not make a bid for the airline. Norwegian’s share price subsequently fell by 20%.

There were some big prizes for IAG in buying Norwegian: A significantly increased presence at Gatwick; a new region for the group in the Nordics and an increased reach for the Avios currency through the Norwegian Reward frequent flyer programme.

However, there would be challenges. Given the number of overlapping city pairs between IAG airlines and Norwegian, regulators would have demanded that slots be forfeited. Any attempt to add Norwegian to the transatlantic joint-venture would have been strongly resisted by competitors.

As for Norwegian, it will announce its results for Q4 2018 on Thursday 14 February. The latest published fleet plan shows that it plans to take delivery of 21 new aircraft this year, including 5 Boeing 787-9 aircraft and 16 Boeing 737 MAX 8 aircraft.

There are yet further substantial deliveries planned for 2020 and 2021, including 22 Airbus A321 Neo Long Range aircraft. Norwegian maintains that all aircraft deliveries in the first half of this year are fully financed. The next financial results will inevitably be scrutinised closely.

Qantas – Project Sunrise

Before Qantas launched non-stop flights from London Heathrow to Perth, it made much of the fact that it was looking at every aspect of the in-flight experience for ultra long-haul travel.

It has partnered with Charles Perkin Centre at Sydney University to research passenger needs. So far on London to Perth flights, changes have been largely evolutionary such as in-flight menus and cabin lighting.

Qantas also continues, under the codename “Project Sunrise”, to study potential aircraft orders from Airbus or Boeing for non-stop flights from London to Sydney from 2022. A decision on an aircraft order should be made by the end of this year.

Qantas has released the top five suggestions from passengers from its research:

– Provide “sense of separation” experiences where passengers can be social but then “zone out” with either virtual reality relaxation zones, audio mindfulness experiences, or through the broader inflight entertainment.

– Spaces to do gentle exercise/stretches, promoting circulation and comfort.

– Wireless, noise cancelling headsets

– Innovative cabin designs across the entire aircraft, considering both seat and non-seat spaces to focus on a broad range of traveller needs including comfort, sleep, dining, entertainment and state of mind.

– An inflight cafe offering both alcoholic and non-alcoholic beverages including wine, fresh juices, herbal teas and tisanes and mocktails along with snacks including dips with vegetable sticks as well as “treat foods”.

Any scepticism as to how many of these come to fruition is justified. Before airlines took delivery of the Airbus A380, there was much hype about the potential for onboard gyms and casinos that never materialised. Any space on the aircraft not dedicated to seating is lost revenue that has to be compensated for.

Oneworld Celebrates 20 Years

The Oneworld Alliance celebrates its 20th anniversary this coming Friday 1 February.

The alliance was formed on 1 February 1999. Its founding members were American Airlines, British Airways, Canadian Airlines, Cathay Pacific and Qantas. Finnair and Iberia joined shortly after launch in September 1999.

Canadian Airlines was acquired by Air Canada in 2000. It leads of list of many now defunct members including Air Berlin, Malev and Mexicana. Royal Air Maroc is due to join the alliance next year. Last year, Fiji Airways became the first “Oneworld Connect” member, which offers reciprocal benefits to fewer alliance members.

Thanks in part due to bmi leaving the Star Alliance in 2012, Oneworld has remained the predominant alliance in the UK.

It has not always been a happily family, particularly with tensions between Qatar Airways and some other members being played out in public.

According to reports a media event will be held on Friday in London to mark the anniversary.

The one significant gap in the Oneworld membership is an airline in mainland China. China Southern left Skyteam on 1 January this year. It has announced a Memorandum of Understanding with Finnair for reciprocal codesharing and has also signed an agreement with American Airlines for extended reciprocal codesharing and frequent flyer recognition.

BA has had a limited reciprocal codeshare agreement with China Southern for some time and, according to local media reports, has signed a Memorandum of Understanding with China Southern for future frequent flyer recognition.

BA’s Centenary Shapes Up

We’re starting to get a flavour of what BA has planned for its centenary year.

Last week, BA ran a limited flash sale offering 100 return seats on selected long-haul routes for £100 each way.

It is also confirmed the first of what is expected to be a series of special liveries, a Boeing 747 in a retro BOAC livery. And the first of “100 acts of kindness” as part of its BA Magic series.

On top of all that, BA has partnered with Founders Forum to invite start-ups to pitch new ideas for The Future Of Flying. This is similar to IAG’s own start-up accelerator programme Hangar 51.

Mark Vanhoenacker Joins The Financial Times

BA pilot Mark Vanhoenacker, who has penned two well-received books “Skyfaring: A Journey with a Pilot” and “How To Land A Plane”, has joined the Financial Times as a regular columnist.

Mark filed his first column “How I fell in love with jumbo jets” last week.

Also of note this week:

A major shareholder in Flybe is calling for an Extraordinary General Meeting to replace its Chairman. (Sky News)

“Mildly interesting little known flying facts.” (Virgin Atlantic)

Late Post Publication Updates

[Reserved for updates during the day.]

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