Monday Briefing – 25 June 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel

Heathrow Expansion CGI Image
Heathrow Expansion CGI Image (Image Credit: Heathrow)

Hello and welcome to our Monday Briefing for the week beginning 25 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

Heathrow Third Runway Vote

The House Of Commons will vote on the Government’s Airports National Policy Statement this afternoon, which proposes a third runway at London Heathrow.

The Conservative party has issued a “three line whip” for its MPs to vote in favour. The Labour Party has allowed its MPs a free vote, though its front bench is not in favour of a third runway. The trade union Unite, which is a significant donor to the Labour Party, has come out in favour of the third runway.

The Conservative party position has prompted Gregs Hands, MP for Chelsea & Fulham, to resign from the Government as minister for trade policy.

Estimates on Sunday evening are that around 15 Conservative MPs will vote against the Government and that around 100 Labour MPs will defy their front bench to vote in favour of the runway.

There has been a deafening silence from Boris Johnson, MP for Uxbridge and South Ruislip, who said in 2015 “I will lie down in front of those bulldozers and stop the construction of that third runway.” Boris Johnson is reported to be out of the country at an undisclosed location.

Irrespective of the outcome of the vote, there will be a judicial review which is supported by the Mayor Of London, Sadiq Khan. A judicial review is a legal challenge, not to the actual merits of the third runway itself, but the manner in which the Government reached its decision. It is an expensive process that is not easily won.

There is also disquiet about the cost of the third runway, notably from BA’s parent company, International Airlines Group.

Assuming there are no further obstacles, construction of the third runway could begin in 2021.

Craig Kreeger to retire from Virgin Atlantic

In 12 months’ time, Virgin Atlantic will be different in many ways from today.

It should have taken delivery of its first Airbus A350-1000 aircraft. It should have launched, or at least be close to launching, a new expanded transatlantic joint-venture with Air France-KLM and Delta.

Perhaps more significantly, Delta should be the single largest shareholder as Sir Richard Branson is due to sell a 31% stake in the airline he founded to Air France-KLM.

Virgin will also have a new CEO, Shai Weiss, who will replace Craig Kreeger from 1 January 2018. Craig Kreeger was the architect of Virgin’s “Plan to Win” which was intended to achieve record levels of profitability this year. That has proved elusive, thanks to a number of factors, notably Boeing 787 engine issues. Virgin is due to launch a new business plan “Velocity” next year. Details are scant at the moment, but given that Virgin is some distance from consistent profitability, further changes to the business are expected.

Hoovering Up Avios

For a long time there has been a huge industry on both sides of the Atlantic dedicated to squeezing out every last possible frequent flyer mile at every opportunity.

In Europe this has been aided in part by the adoption of the “Avios” currency across a number of frequent flyer programmes, notably BA Executive Club and Iberia Plus. In addition, there is ability to move Avios between these programmes and take advantage of arbitrage opportunities.

Iberia sparked a frenzy this week by launching a seemingly too good to be true promotion whereby 9,000 bonus Avios would awarded for flights booked on the airline, subject to a cap of 90,000 Avios. 90,000 Avios is enough for a return flight to New York in BA Club World (travelling off peak and subject to a surcharge of nearly £500).

Bonus frequent flyer promotions are nothing new. However, this was unusual in that the Avios are awarded immediately and won’t be forfeited if the flights are not taken, meaning passengers can book the cheapest possible flights anywhere on Iberia’s network and effectively throw away their tickets. This is a radical break with convention. The Avios do expire if not used by December of this year, but this appears to be circumvented by transferring them to another account eg BA Executive Club. (At some point in the future, a single “Avios Bank” will be introduced across all Avios frequent flyer programmes.)

In spite of the relatively short promotional period (which has now ended), it has attracted a huge amount of attention worldwide. It must have prompted booking activity far beyond what could have been expected. It does have shades of Hoover’s notorious free flights promotion. Suspect this will be one to watch.

About the Airbus statement

The news agenda in the UK on Friday last week was dominated by a statement by Airbus that a “No Deal” Brexit would severely impede its ability to do business in the UK.

The announcement was met with either nonchalance and surprise concern from politicians. This is despite the fact that MPs had just waved The EU Withdrawal Bill through the House Of Commons which ruled out the UK staying in the European Economic Area, the Single Market and Customs Union.

Be under no illusion, Airbus is only stating publicly what it and businesses in many other sectors have said in private to Government for two years.

At this stage, it is impossible to predict how the current Brexit impasse will be resolved. However, that a strategically important European business like Airbus felt the need to go public and the dismal response is a damning indictment of Britain’s political class, on both sides of the House of Commons.

Also of note this week:

Airlines for Europe rails against Air Traffic Control strikes in Europe. (Airlines for Europe)

Cathay Pacific receives its first Airbus A350-1000 aircraft. (Cathay Pacific)

Etihad introduces a programme to second pilots to Emirates. (Reuters)

The Financial Times interviews Norwegian founder and CEO Bjorn Kos amid continued speculation about the airline’s future. (Financial Times)

How to miss a flight. (Financial Times)

Virgin Atlantic reflects on 34 years of its Flying Lady. (Virgin Atlantic)

Late Post Publication Updates:

[Reserved for updates during the day.]

Our Monday Briefing is published every Monday at 06:00 BST. If you have any comments, suggestions or tips then please drop us a line at mail [@] londonairtravel.com

If you want to receive this, and all other posts, directly to your inbox simply subscribe using the box at the foot of this page.

Virgin Atlantic CEO Craig Kreeger to retire

Virgin Atlantic’s CEO Craig Kreeger is to retire from the airline from 1 January 2019. Craig will be replaced by Shai Weiss.

London Air Travel

Virgin Atlantic Logo
Virgin Atlantic Logo (Image Credit: Virgin Atlantic)

Virgin Atlantic has today, Thursday 21 June 2018, announced that its CEO Craig Kreeger is to retire from the airline from 1 January 2019.

Craig Kreeger will be replaced by an internal appointment, Shai Weiss. Shai is currently Chief Commercial Officer and and has been with the airline since July 2014 having previously worked with a number of Virgin businesses.

Craig joined Virgin from American Airlines where he was closely involved in the launch of its transatlantic joint-venture with BA in 2010. This was in itself a radical departure for Virgin which had traditionally appointed senior executives from within.

“Plan To Win”

During his tenure Craig oversaw a number of radical changes.

These included the launch of Virgin’s transatlantic joint-venture with Delta, a reshaping of its route network, a slimming down of its Head Office, and the renewal of Virgin’s fleet with the delivery of 17 Boeing 787-9 Dreamliner aircraft.

Craig was also the architect of Virgin’s “Plan To Win” which was intended to secure record levels of profitability by 2018, by beating the previous record of £98m in 1999.

Whilst Virgin is still a very strong brand and can market itself with a confidence and flair that few can match (aided in part by BA’s continued ability to throw PR banana skins in front of itself), consistent profitability has proved elusive. Virgin reported a loss of £28.4m before exceptional items for 2017.

“Velocity”

The next 12 months or so should see one of the most significant events in Virgin Atlantic’s 34 year history.

Virgin and its 49% shareholder Delta are in the process of securing regulatory approval to combine their transatlantic joint-venture with that of Delta and Air France-KLM. The latter joint-venture launched in 2009 and traces its origins back further to joint-ventures between KLM and Northwest Airlines and Air France and Delta.

As part of this, Sir Richard Branson’s Virgin Group will cede control of the airline, by selling a 31% stake in the airline to Air France-KLM. This will leave Delta as the single largest shareholder.

Virgin has today alluded to a new corporate plan which will succeed “Plan To Win”. Known as “Velocity” (and not to be confused with Virgin Australia’s frequent flyer programme), this will include the launch of the combined joint-venture with Air France-KLM. Previous announcements have indicated that this will include cost savings such as co-location at airports (which would be difficult to achieve at Heathrow) and reciprocal frequent flyer recognition.

However, not much else has been said.

2019 is already shaping up to be a significant year for Virgin Atlantic with the arrival of the first of 12 Airbus A350-1000 aircraft which will operate at both Heathrow and Gatwick. Further developments will be awaited very much with interest.

LOT launches London City – Budapest

LOT Polish Airlines will fly from London City airport to Budapest twice daily on weekdays and once a day on weekends from Monday 18 February 2019.

London Air Travel

LOT Polish Airlines Embraer E195 aircraft
LOT Polish Airlines Embraer E195 aircraft (Image Credit: LOT Polish Airlines)

LOT Polish Airlines (“LOT”) is launched a new second route from London City to Budapest.

The airline will fly from London City airport to Budapest twice daily on weekdays and once a day on weekends. This announcement comes just a week after LOT announced London City – Warsaw.

Like Warsaw, this will be the only direct route from London City to Budapest. However, Budapest is a much smaller airport for LOT than Warsaw, so there’s little to offer in terms of onward connections.

The official announcement from London City airport says the route launches on Tuesday 19 February 2019. However, we can see flights on sale from Monday 18 February 2019.

Like London City – Warsaw, flights will be operated with an Embraer E190 aircraft. LOT will offer three classes of service, economy, premium economy and business class, on this route.

Flights are on sale now at LOT.com

London City – Budapest

Flight LO2022 Depart London City 09:15 – Arrive Budapest 13:00 (Daily, except Sunday)
Flight LO2024 Depart London City 19:30 – Arrive Budapest 23:00 (Daily, except Saturday)

Flight LO2021 Depart Budapest 07:00 – Arrive London City 08:45 (Daily, except Sunday)
Flight LO2023 Depart Budapest 17:15 – Arrive London City 19:00 (Daily, except Saturday)

The Atlantic Update – Wednesday 20 June 2018

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

London Air Travel

Norwegian Boeing 787-9 Dreamliner
Norwegian Boeing 787-9 Dreamliner

Hello and welcome to the The Atlantic Update for Wednesday 20 June 2018, 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 BST.

Does Lufthansa really want to buy Norwegian?

Interest in the possible sale of Norwegian was piqued earlier this week after Lufthansa revealed it had held discussions with the airline about a possible bid.

It appears that no offer has been tabled. Lufthansa Group CEO Carsten Spohr made only vague comments about ongoing consolidation in Europe. Lufthansa is of course no stranger to low cost travel. It has transferred all short-haul operations outside of its Frankfurt and Munich hubs to Eurowings. It has also launched low cost long-haul routes under the Eurowings brand, but has stayed firmly in its home territory at cities such as Cologne and Dusseldorf.

This is in sharp contrast to both Norwegian and IAG’s own low cost long-haul brand LEVEL which have sought to become true pan-European brands.

Lufthansa buying Norwegian would give it a substantial presence at Gatwick. And this would not the first time Lufthansa has gained a strong foothold in London. It acquired full control of bmi British Midland in 2009, albeit not entirely at a time and price of its choosing. Its former owner Sir Michael Bishop exercised an option to sell the airline to Lufthansa that had previously been agreed in 1999. Three years later, after heavy losses and many cash injections through debt for equity swaps, Lufthansa sold bmi to BA’s parent company IAG and substantially weakened the Star Alliance in London in the process.

Whoever takes over Norwegian will need to undertake aggressive action to improve its financial performance. IAG would probably retain the Norwegian brand and it has indicated it would keep its existing customer proposition in tact. What IAG would probably do is curtail its growth ambitions, refocus the route network on profitable flying and transfer many back office functions to its internal Global Business Services platform. It is not so certain that Lufthansa would be able to do this with the same vigour. It is also uncertain whether Lufthansa would have the appetite to compete at Gatwick where BA has already made a number of competitive moves against Norwegian.

Fort Lauderdale Runway Closure

The Associated Press reports that Fort Lauderdale airport is to close one of its two runways for five months from June 2019.

During this time all arriving and departing flights will have to use the south runway. This is likely to lead to a reduction in flights to the airport of around 20-25%.
Continue reading “The Atlantic Update – Wednesday 20 June 2018”

Travel Media & Technology Bulletin – Tuesday 19 June 2018

Our weekly bulletin on the latest developments in media and technology around the world, as published every Tuesday morning at 06:00 BST.

London Air Travel

Coal Drops Yard, Kings Cross
Coal Drops Yard, Kings Cross (Image Credit: Kings Cross)

Hello and welcome to our weekly travel media and technology bulletin featuring the latest developments on media and technology around the world, published every Tuesday at 06:00 BST.

Samsung at Coal Drops Yard Kings Cross

Samsung has confirmed it is opening a “showcase store and digital playground” at Coal Drops Yard in Kings Cross.

Designed by Heatherwick Studio, Coal Drops Yard is a reinvented coal store which opens to the public in autumn of this year. Samsung will occupy 20,000 sq ft on the upper level of the development. If Samsung’s store in The Meatpacking District New York is anything to go by, this should be very impressive and will certainly give the Apple store on Regent Street a run for its money.

AT&T & Time Warner become Warner Media

AT&T, following a successful win in a court case brought by the Department of Justice, has now acquired Time Warner and has become WarnerMedia.

The telecommunications group now owns a larger number of media properties such as Warner Bros and CNN. This is likely to trigger greater consolidation in the US media market. Comcast (owner of NBC) is currently engaged in a bidding war with Disney to acquire most of the assets of Fox including its film and TV studios and its stake in Sky in Europe.
Continue reading “Travel Media & Technology Bulletin – Tuesday 19 June 2018”

Monday Briefing – 18 June 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel

BA Boeing 787 at British Airways Maintenance Cardiff
BA Boeing 787 at British Airways Maintenance Cardiff (Image Credit: British Airways)

Hello and welcome to our Monday Briefing for the week beginning 18 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

BA Grounds 7 Boeing 787 Dreamliner Aircraft

BA has now grounded 7 of its 28 strong Boeing 787 Dreamliner fleet.

2 Boeing 787-8 aircraft have long been grounded. 5 Boeing 787-9 aircraft were grounded almost simultaneously a little over a week ago.

Rolls Royce also announced last week that checks may be required on “Package B” engines as well as “Package C” engines. BA has not made any public statements since the latest Rolls-Royce announcement. However, IAG CEO Willie Walsh has not hidden his dissatisfaction with Rolls-Royce and the latest announcement will not instil confidence.

We have summarised the impact on BA’s operations here. The Seattle Times has an excellent article on the broader industry issues affecting all aircraft and engine manufacturers.

Etihad Reviews Aircraft Orders

Etihad has announced a loss before exceptional items of USD$ 1.52 billion for 2017. This compares to a loss for USD$ 1.95 billion for 2016.

These headline figures are only for the airline’s core operations and do not include losses from exceptional items or investments. The group has of course been beset by its disastrous strategy of buying minority stakes in airlines, notably Air Berlin and Alitalia.

Etihad has already undertaken a number of network changes including the suspension of Dallas Fort Worth, Entebbe, Jaipur, San Francisco, Tehran, and Venice.

It is now reported to be in discussions with aircraft manufacturers to review its aircraft order book, which is substantial. Etihad has 21 Boeing 787-9, 30 Boeing 787-10, 25 Boeing 777X and 62 Airbus A350 wide body aircraft on order. Given recent network developments, it is likely that any new aircraft will only act as replacement for retiring aircraft. Therefore, it is implausible that a large number of these orders won’t be cancelled.
Continue reading “Monday Briefing – 18 June 2018”

BA Boeing 787 Cancellations June Update

Here is the latest on the impact of Rolls-Royce engine inspections on British Airways Boeing 787 flights at London Heathrow.

London Air Travel

BA Boeing 787 at British Airways Maintenance Cardiff
BA Boeing 787 at British Airways Maintenance Cardiff (Image Credit: British Airways)

British Airways Boeing 787 flights continue to disrupted by additional maintenance to the Rolls-Royce engines of its Boeing 787 fleet.

Here is a summary of the issue as of Sunday 17 June 2018.

Background

Operators of the Boeing 787 Dreamliner are required to comply with an Air Worthiness Directive issued by the Federal Aviation Administration in the United States.

It limits the scope of the ETOPS (“Extended-range Twin-engine Operational Performance Standard”). ETOPS allows twin-engined aircraft like the Boeing 787 to operate between 60 and 330 minutes’ away from the nearest airport that can handle a diversion of the aircraft.

This affects aircraft with Rolls-Royce Trent 1000 “Package C” engines. Rolls-Royce has also issued a statement on Monday 11 June 2018 advising that additional checks may be required on “Package B” engines. BA has not commented on the issue since the latest Rolls-Royce statement.

Continue reading “BA Boeing 787 Cancellations June Update”

BA Gatwick 10 abreast economy Boeing 777 Update

BA is progressively the number of economy seats on Boeing 777 aircraft at Gatwick from 9 to 10 seats a row. Here is an update on the progress of the refurbishment.

London Air Travel

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

British Airways is now more than a third of its way through the refurbishment of its fleet of Boeing 777-200 aircraft at London Gatwick.

The refurbishment programme includes new seats in World Traveller and World Traveller Plus, new in-flight entertainment systems and cabin interiors. Most importantly of all, the seats in World Traveller are increased from 9 to 10 a row.

Please see here for images of the first refurbished aircraft which were unveiled on Monday 5 March 2018.

At the moment only three class Boeing 777-200 aircraft have been refurbished. As at Saturday 16 June 2018, three Boeing 777-200 aircraft (registrations G-VIIR, G-VIIX, G-VIIO) have been refurbished. A fourth aircraft (registration G-VIIP) was sent to Singapore for refurbishment on 9 June 2018. Each refurbishment takes around a month.

It is expected that the refurbishment of three class Boeing 777-200 aircraft will be complete by late October 2018. The refurbishment of four class Boeing 777-200 aircraft should be complete by late March 2019. Once the Gatwick fleet is complete, BA will then refurbish some Heathrow aircraft.

Seating Plans Of Refurbished Aircraft

BA has updated the seat maps on its website to include the new cabin configuration.

If you are flying on a 9 abreast Boeing 777 you should see the following cabin configurations on the seat map for your reservation in the Manage My Booking tool:

Club World – Rows 1 – 11 (40 seats)
World Traveller Plus – Rows 12 – 14 (24 seats)
World Traveller – Rows 16 – 40 (3-3-3 configuration)

If you are flying on a 10 abreast Boeing 777 you should see the following cabin configurations on the seat map for your reservation in the Manage My Booking tool:

Club World – Rows 1 – 4 (32 seats)
World Traveller Plus – Rows 10 – 16 (52 seats)
World Traveller – Rows 20 – 46 (3-4-3 configuration)
Continue reading “BA Gatwick 10 abreast economy Boeing 777 Update”

LOT launches London City – Warsaw

LOT Polish Airlines will fly from London City airport to Warsaw twice daily on weekdays and once a day on weekends from Monday 7 January 2019.

London Air Travel

LOT Polish Airlines Embraer E195 aircraft
LOT Polish Airlines Embraer E195 aircraft (Image Credit: LOT Polish Airlines)

LOT Polish Airlines (“LOT”) has launched a new route from London City to Warsaw.

The airline will fly from London City airport to Warsaw twice daily on weekdays and once a day on weekends. The route launches on Monday 7 January 2019. This will be the only direct route from London City to Warsaw.

It is of course possible to connect at Warsaw to many destinations in Central & Eastern Europe such as Vilnius, Kiev and Riga.

Flights will be operated with an Embraer E190 aircraft, which LOT has yet to take delivery of. LOT will offer three classes of service, economy, premium economy and business class, on this route.

LOT will continue to fly from London Heathrow to Warsaw up to three times daily, with the Boeing 737 MAX 8 aircraft.

Flights are on sale now at LOT.com

London City – Warsaw

Flight LO288 Depart London City 09:30 – Arrive Warsaw 13:00 (Daily, except Sundays)
Flight LO290 Depart London City 18:30 – Arrive Warsaw 22:00 (Daily, except Saturdays)

Flight LO287 Depart Warsaw 07:15 – Arrive London City 09:00 (Daily, except Sundays)
Flight LO289 Depart Warsaw 16:15 – Arrive London City 18:00 (Daily, except Saturdays)

The Atlantic Update – Wednesday 13 June 2018

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

London Air Travel

Terminal 2, Dublin Airport
Terminal 2, Dublin Airport (Image Credit: Dublin Airport)

Hello and welcome to the The Atlantic Update for Wednesday 13 June 2018, 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 BST.

Willie Walsh on Aer Lingus growth opportunities

International Airlines Group CEO Willie Walsh spoke at the IATA AGM last week and GTMC conference this week. At both events, Willie Walsh was keen to talk about the growth opportunities for Aer Lingus.

Whilst Aer Lingus may not be the largest member of IAG, by profit margin it is the star pupil of the group. In recent years it has added many new transatlantic routes including Miami, Philadelphia and Seattle.

Next year, Aer Lingus will take delivery of four of twelve Airbus A321 Long Range aircraft on order. This aircraft is a variant of the Airbus A321neo with a range of 4,000 nautical miles. Aer Lingus has invited US airports to express an interest in it opening new routes. Unsurprisingly, there has been a strong response from many airports.

It is expected that new routes operated by the Airbus A321 Long Range next year will be announced in the coming months, as well as additional frequencies to existing routes. This could well introduce new transatlantic routes to Europe, with the benefit of Customs & immigration pre-clearance in Dublin.

On a related note, there is still no word of any progress in Aer Lingus joining either the transatlantic joint-venture with American Airlines and BA, nor the Oneworld alliance.

As far as BA is concerned, it has traditionally announced one new long-haul route from London Heathrow to North America a year. The most recent ones being Austin, San Jose, New Orleans and Nashville. However, Willie Walsh did indicate that this was unlikely to happen this year.

BA Confirms Calgary Suspension

British Airways has suspended London Heathrow – Calgary for the winter season

As reported last week, BA has confirmed it has suspended London Heathrow – Calgary from Sunday 28 October 2018 to Sunday 31 March 2019.

Full details of rebooking options are here. Passengers are entitled to a refund, or to rebook to an alternative BA destination in the US and Canada. BA has now also secured a rebooking agreement with United Airlines via Chicago O’Hare and other hubs in the US. Further rebooking options may become available in the next few days.

It is relatively rare for BA to suspend a transatlantic route from Heathrow, even for the winter season. The last suspension we can recall is London Heathrow – Detroit in 2008.

Also of note this week:

United’s first Boeing 737 MAX 9 aircraft enters service. (United)

Late Post Publication Updates:

[Reseved for updates during the day.]

The Atlantic Update is published every Wednesday at 06:00 BST. If you have any comments, suggestions or tips then please drop us a line at mail [@] londonairtravel.com