Hello and welcome to the The Atlantic Update for Wednesday 21 March 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 GMT.
US East Coast Severe Weather
This is like Groundhog Day.
The US East Coast is once again set to be beset by severe weather today, Wednesday 21 March.
At the time of writing, American Airlines and BA have cancelled all flights from all London airports to Newark and New York JFK. BA has also cancelled some flights to Boston and Philadelphia. BA has also retimed some flights to Philadelphia and Washington Dulles.
Virgin Atlantic and Delta have cancelled all flights from London Heathrow to Boston and Newark and almost all flights to New York JFK.
United has cancelled and retimed some flights from London Heathrow to Newark.
Nowergian has also cancelled all flights from London Gatwick to New York JFK.
Both BA and Virgin have implemented flexible rebooking policies allowing passengers due to travel up to Wednesday 21 March to rebook up to Sunday 25 March 2018.
Norwegian plans finance raising exercise
Norwegian has announced a number of measures to raise capital and improve cash flow.
It has today, Wednesday 21 March, raised NKr1.3bn (£120m) of equity through a private share placement. It will also sell six Boeing 787-9 aircraft to a wholly owned aircraft leasing company, Arctic Aviation Assets. This subsidiary is to also sell five Airbus A320Neo aircraft.
Norwegian is to also conduct a strategic review of its frequent flyer programme Norwegian Reward. This may lead to the sale of the programme. The programme currently more than 7 million members. It has to be said that selling off a frequent flyer programme is not a good idea in the long term when it is to inextricably linked to airline marketing activity and passenger behaviour. Air Canada began to divest of its frequent flyer programme in 2003 and it is now wholly owned by an independent company. Air Canada announced last year it is to launch a new wholly owned frequent flyer programme in 2020.
Norwegian has also announced an expected loss before tax of NKr2.6bn for the first quarter of 2018, compared to a loss of NKr1.8bn for 2017. Norwegian has cited adverse currency movements and higher fuel prices for the widening of losses.
The airline still plans to grow capacity by some 40% this year but growth is likely to moderate substantially in future years.
There have long been questions over the sustainability of Norwegian’s aggressive growth strategy. Airlines survive on cashflow from forward bookings and the availability of credit from suppliers. These latest announcements will not instil confidence.
Full details of the finance raising measures can be accessed through the Norwegian Media Centre.
10 Years of EU-US Open Skies
Next week will be the 10th anniversary of the EU-US Open Skies treaty taking effect.
Until 30 March 2008, under a treaty known as Bermuda II, only two airlines from the UK and US could fly from London Heathrow to the United States. These were BA and Virgin Atlantic from the UK and American Airlines and United Airlines from the US. It also meant that American and BA could only operate certain routes at London Gatwick.
EU-US Open Skies allowed Continental, Delta, Northwest Airlines and US Airways access to Heathrow. Of course Continental, Northwest Airlines and US Airways have since been subsumed to United, Delta and American Airlines respectively.
Heathrow gained many new and reinstated routes to destinations such as Charlotte, Detroit, Las Vegas, Minneapolis, Portland, Raleigh Durham and Salt Lake City.
It is also enabled American and BA, on their third attempt, to secure regulatory approval for a joint-venture. This subsequently saw BA add or reinstate routes from London Heathrow to Austin, New Orleans, San Diego, San Jose and from later this year, Nashville.
You can read more on the impact of EU-US Open Skies here.
Virgin Terminal Change at Miami
Virgin Atlantic has confirmed that, from Thursday 29 March 2018, it will operate out of Concourse H of the South Terminal at Miami International Airport.
Virgin Atlantic passengers travelling from Miami International airport should arrive at between doors 24 and 25 of Concourse H. Virgin Atlantic check-in desks are located on Level 2 of Concourse H.
Upper Class passengers and Virgin Flying Club Gold card members will be able to use the Delta Sky Club lounge after security, at Concourse H.
The Atlantic Update is published every Wednesday at 06:00 GMT. If you have any comments, suggestions or tips then please drop us a line at mail [@] londonairtravel.com