London Air Travel

London Air Travel

Welcome to London Air Travel’s Monday Briefing for the week beginning 26 October 2020.

Luis Gallego Unveils His First Results As IAG CEO

This Friday, 30 October 2020, Luis Gallego will present his first set of quarterly results as CEO of IAG.

Sean Doyle will also address investors for the first time in his capacity as CEO of BA.

We have a preview of what to expect. Last week, IAG announced a preliminary operating loss of €1.3 billion for the quarter to 30 September.

Revenue declined 83% to €1.2 billion, with revenue passenger kilometres falling by 88%. Average load factors fell by 38.8 percentage points to 48.9%. None of these numbers were broken down by airline.

Capacity for the 4th quarter will be no less than 30% of last year’s levels. BA has pulled at short notice some long-haul routes that were due to resume next month including Denver, Las Vegas and Seoul. IAG has also abandoned any hope of breaking even on a cash flow basis by the end of this year.

On a more positive note, IAG’s cash balance remains strong with €6.6 billion of cash at the end of September, plus €2.74 billion from its recent rights issue.

However, some debt has to be repaid in the first half of next year. With IAG’s three European markets, Ireland, Spain and the UK, facing tighter restrictions, traffic is likely to be severely depressed well into 2021.

Air France-KLM and Lufthansa will also announce their third quarter results on 30 October and 5 November respectively. Ordinarily at this time of year, IAG also holds its annual Capital Markets Day, but no event has been scheduled yet.

Back to Sean Doyle, he will be a panellist at a Royal Aeronautical Society event on climate change next month.

Heathrow’s £17 Billion Debt Mountain

Heathrow is also due to report its third quarter results this week, on Wednesday 28 October at 15:00.

Yesterday’s Sunday Telegraph reported Heathrow has warned its shareholders they may have to provide financial support to the heavily indebted airport. Heathrow owes, through a horrifically complicated structure, a large number of banks and bondholders no less than £17 billion with an annual interest bill of £500m.

Airlines and regulators have understandably balked at the suggestion that Heathrow’s lost income should be compensated for through higher passenger charges.

Heathrow clearly expects to benefit from airlines consolidating London operations at the airport and available slots being filled by new entrants, but it will be expected to take its share of the pain of COVID-19.

Quarantine To Be Waived For The “Jet Set”?

Somebody briefed yesterday’s Sunday Times, possibly not with the intention of encouraging support for the government, that the mandatory quarantine regime may be waived for the “jet set”.

This is said to include those most loved professionals “senior bankers, hedge fund managers and executives involved in high-value deals” who “come in private jets and have a chauffeur-driven car”.

Given the way the UK government has been harangued in recent days for its inability to “read the room” this could well have been leaked to torpedo these plans.

London Air Travel

Welcome to London Air Travel’s Monday Briefing for the week beginning 19 October 2020.

Sean Doyle Replaces Alex Cruz

When Keith Williams was promoted from Chief Financial Officer to become BA’s first CEO after the formation of IAG in 2011, Willie Walsh left BA with a not particularly subtle message about who was really in charge.

He was reported to have quipped to reporters that Keith had been promoted from the 2nd most important job in BA to the 2nd most important job in BA.

Last week, Sean Doyle was promoted to the 2nd most important job in BA after Alex Cruz departed the airline. This was the first major management reshuffle by IAG CEO Luis Gallego. For a group that likes to make much of the fact that it can move executives around the group, no alternative role in IAG was found for Alex.

Although Sean has a relatively low profile, his appointment has been welcomed. Colleagues praise his attention to detail and knowledge of the industry. This is clearly not seen as the time to bring in an outsider. One former colleague told the Financial Times:

“He will make the decisions that will need to be made, but will be able to bring people with him. There really are not that many people with the depth and breadth of experience of the company,”

Before becoming CEO of Aer Lingus, Sean was responsible for fleet and network planning at BA, as well as its joint-business with American Airlines. All of these will be a focus in the coming years.

As for Alex Cruz, there’s been no shortage of comment on his departure. The most balanced comes from John Strickland for Forbes who rightly points out that some of things BA has been criticised for during Alex’s leadership were not of his making.

It was, after all, Willie Walsh’s insistence a few years ago that BA did not need to change the layout of its Club World cabin. Decisions on aircraft density, as well as many other matters like new aircraft orders and capital expenditure, sit with IAG not BA.

That said, a lot of unnecessary negative publicity could have been avoided with a little foresight. Saying BA might withdraw free meals in long-haul economy when there was nothing close to a plan to do so, caused a lot of unnecessary negative headlines. Many negative headlines about the introduction of buy-on-board in short-haul economy could have been avoided if it was properly tested on a smaller scale at Gatwick first, before being rolled out at Heathrow.

Few who have followed BA’s approach to industrial relations over decades would have believed it would have ever gone ahead with a threat, no doubt the work of lawyers, to “fire and rehire” staff. But it was clearly wrong-footed by how this was seized upon by staff and trade unions. Hence what felt like an overly rehearsed performance by Alex before the Transport Select Committee last month.

Back to Sean Doyle, he is due to speak at the Airlines 2050 virtual conference at 10:15 BST today. Luis Gallego will also present his first IAG quarterly results next Friday, 30 October.

Winter Timetable

The clocks go back one hour in the UK on Sunday 25 October. This also marks the start of the winter timetable.

Ordinarily, we should be able to present a long list of schedule changes for the winter season. Not this year.

At London Heathrow, BA will resume short-haul flights to Basel, Billund, Gran Canaria, Malta, Vienna and Zagreb. Flights also resume to Amman which, along with Moscow Domodedovo, switches to short-haul configured aircraft.

Next month, BA will also resume scheduled long-haul flights from London Heathrow to Bangkok, Denver, Las Vegas, Phoenix, Santiago and Seoul. Many other routes benefit from frequency increases, including Boston which switches to twice daily. BA will also return to Orlando and Mauritius at Gatwick.

London Air Travel

Welcome to London Air Travel’s Monday Briefing for the week beginning 12 October.

The Qantas Flight To Nowhere

When it comes to inventive ways to raise cash during COVID-19, Qantas has been leading the pack.

Having sold off amenity kits and fully stocked storage carts to frequent flyers, on Saturday Qantas operated a “flight to nowhere” from Sydney to Sydney. Passengers on board the Boeing 787-9 aircraft for the 8 hour plus time were afforded views of New South Wales, Queensland and Uluru in the Northern Territory.

Qantas has released B-Roll footage of Saturday’s flight, a clip of which you watch here.

Whatever the interest may be for similar flights in Europe, airlines will have to resist pressure over environmental concerns. There would have been huge demand for final BA Boeing 747 flights from Heathrow before their withdrawal from the airport, which the airline did not offer.

Australia: Come Fly With Me

Staying with Qantas, next month the airline will celebrate its centenary which also marks the birth of civil aviation in Australia.

A new three part series “Australia Come Fly With Me” begins this week on SBS Australia charting the course of civil aviation in Australia and how it has reflected cultural and societal change. Judging by the trailer above, there’s no shortage of archive footage. Sadly, there’s no sign yet of this series being shown in the UK.

BA Long Haul Route Updates

A familiar pattern of some steps forward and some steps backward, as far as BA’s long-haul route network is concerned.

At Heathrow, BA restarted flights to The Seychelles on Saturday. BA launches a new route to Lahore today. BA will also transfer its route to Male from Gatwick to Heathrow on Friday. The restart of Riyadh, originally planned for early October, is postponed again.

Meanwhile at Gatwick, BA returns to Grenada, via St Lucia, on Wednesday. The return of a number of other routes including Cancun and Mauritius is postponed again.

BA has also postponed the planned launch of its new route from Gatwick to Montego Bay from 13 October to provisionally 12 December.

London Air Travel

Welcome to London Air Travel’s Monday Briefing for the week beginning 5 October 2020.

COVID-19 Airport Testing

There was a course for optimism for last week as Heathrow CEO John Holland-Kaye indicated that a trial of government supported, but privately funded, COVID-19 airport testing could begin “within weeks”.

According to a report in yesterday’s Sunday Telegraph, Stephen Barclay, Chief Secretary to the Treasury, said a decision would be made “in the coming days” and an announcement is expected from Grant Shapps and Matt Hancock.

The article goes on to say ministers are considering forming a “taskforce” to examine options for international travel. If so, this should have been established months ago and does not instil confidence. Not least given the UK government’s track record on over-promising and under-delivering.

Stephen Barclay appears to favour the approach of Germany where arriving passengers can receive a test result within hours to avoid quarantine. The government’s scientific advisory panel, SAGE, appears to favour “dual testing” where arriving passengers must test negative twice within five days to leave quarantine.

Last week American Airlines announced the start of pre-flight COVID-19 testing on select routes in the Americas. There is no doubt it wants to extend this to transatlantic flights with some urgency.

Dutch newspaper de Volksrant reports a trial has been underway at Helsinki airport where four sniffer dogs were trained to detect COVID-19. Whilst apparently successful in Finland, trials elsewhere have yielded less positive results.

Back to Heathrow, the airport will appear before the Supreme Court this Wednesday to appeal against the judgment of the Court of Appeal that the decision by the UK government to approve a third runway was unlawful.

BA October Schedule

A little over a week ago, we published BA’s planned route network for October.

This has been updated since publication as BA issued a revised route map, pictured above. The restart of flights from London Heathrow to Riyadh has been pushed back to 15 October.

Interestingly, BA has removed Cancun and Mauritius from its October route map even though they are currently showing as operating from 17 and 15 October. BA’s new route to Montego Bay, which is due to launch on 13 October is also absent.

Although some airlines are reported to have cancelled flights to South Africa, BA’s flights to Cape Town and Johannesburg appear to be operating as planned.

Alex Cruz To Speak At FlightGlobal Event

BA CEO Alex Cruz will speak as part of a virtual FlightGlobal event “Airlines 2050” next Monday, 12 October.

The event starts at 09:30 BST. A full agenda which includes a wide range of speaks from airlines and government is available at FlightGlobal and registration is free here.

London Air Travel

Welcome to London Air Travel’s Monday Briefing for the week beginning 28 September 2020.

Aviation Hopes For An October Surprise

As the US election approaches, journalists and pundits are waiting for what is known as the “October Surprise” – this being an event, planned or unplanned, that may change the course of the election.

Airlines must be hoping for something, anything, next month to break the current impasse on travel restrictions.

In the US, airlines are likely to begin very significant redundancies as federal support under the CARES (Coronavirus Aid, Relief, and Economic Security) Act comes to an end.

According to a report by York Aviation commissioned by Airlines UK, Heathrow, IAG and Collinson Group, the UK economy is losing £32m a day due to the lack of a transatlantic air bridge.

Sir Richard Branson has, according to The Telegraph, had what would be described in diplomatic circles as “a frank exchange of views” with Matt Hancock over the government’s failure to secure a transatlantic air bridge.

Speaking to the Sydney Morning Herald, Air New Zealand CEO Greg Forum said that eliminating COVID-19, something New Zealand had aimed to do until it experienced a second wave, was no longer realistic. Taking into account the likely efficacy of a vaccine and the time it will take to distribute globally to those that are prepared to receive it, countries must learn to live with the virus.

IATA has called for a global standard of systematic testing before and after departure as in interim solution to eliminate the need for quarantine measures.

Airline industry bodies are adamant the airline travel is safe. According to a briefing by the EASA reported by Reuters only seven of three million passengers in recent weeks have displayed symptoms of COVID-19 on board aircraft. (Of course, many with COVID-19 are asymptomatic.)

BA Publishes October Route Network

BA has, for the first time in six months, published a definitive list of the destinations it will be flying to in the coming weeks.

You can read a full summary and list here.

At Heathrow, BA restarts daily flights to Cape Town and Johannesburg on 1 October. Three times weekly flights to Bahrain, Riyadh and Tokyo Haneda also start on the same day. Three times weekly flights to Montreal and four times weekly flights to Kuala Lumpur start on 2 October. On the same day, BA returns to Barbados at London Gatwick.

All UK domestic routes benefit from at least daily flights with Edinburgh having 45 return flights a week.

Short-haul routes which benefit from the equivalent of more than three daily flights include Amsterdam, Athens, Barcelona, Berlin Tegel, Dusseldorf, Faro, Istanbul, Larnaca, Lisbon, Malaga, Munich, and Rome Fiumicino.

Virgin Atlantic Appoints New CFO

Virgin Atlantic has, according to filings at Companies House, appointed a new Chief Financial Officer.

Oliver Byers, formerly Senior Vice President (that’s Delta’s influence for you) of Data & Customer Loyalty was appointed to the role last week. Oliver replaces Thomas Mackay who has held the role for the past three years.

On a related note, Virgin has yet to file its annual accounts for last year. It does benefit from an extension to the filing deadline to the end of the year. Observers will be interested to see what comments are made about its ability to continue as a going concern.