On 21 May 2008, British Airways held a press conference at Terminal 7 of New York JFK airport. The then Chief Executive of the airline Willie Walsh outlined ambitious plans for a $30 million revamp of the terminal. The plans included a “drive through” check-in for First Class class passenhers and Gold Executive Club card holders, revamped check-in and security zones, and refurbished lounges and travel spa.
What happened to the global financial system and the world economy shortly afterwards is well documented. The collapse of Lehman Brothers and state bail-outs of banks such as RBS and HBOS led to a dramatic fall in business and first class traffic, particularly from passengers who buy highly profitable flexible fares.
The plans for a revamp were put on hold and have remained on the drawing board ever since.
That is until today when British Airways CEO Alex Cruz announced a $60 million dollar revamp of New York JFK Terminal 7 and a refurbishment of lounges in Boston, San Francisco, Miami, Chicago, Houston and Seattle over the next five years.
London Heathrow to New York is an extremely important route for BA. It flies this route more than ten times a day, primarily with Boeing 747s that each have to up to 86 flat beds in business class. Together with its transatlantic joint-venture partner American Airlines it offers up to 1,000 business class seats a day each way. Yet the competition is also strong. Delta and Virgin Atlantic offer a combined 9 return departures a day between London and New York. United Airlines is also due to introduce its new Polaris business class suite.
BA’s position at Terminal 7 is quite unique in that it actually leases the entire building from the New York Port Authority. From a design perspective, this will be interesting as it should have complete freedom over the design of the interior of the whole terminal, rather than certain designated areas such as lounges.
For regular users of JFK Terminal 7, this news will be welcome. It is generally quite popular with frequent flyers for its relatively compact size and consequently short distances between check-in, lounges and gates. There is also scope for more airlines to move into the terminal following the departure of United Airlines from New York JFK.
In the interests of expectations management it is important to note that no specification for the revamp has been announced. Nor have any timescales been given. No mention of this development was made at the recent International Airlines Group Capital Markets Day and the only investment in the US announced on the day was a revamp of the BA lounges in Boston so we would not expect anything to happen in the coming months.
On a related note, this development clearly means that BA will not be co-locating with American Airlines in Terminal 8 of New York JFK which had been raised as a possibility due to their transatlantic joint-venture.