London Air Travel’s Monday Briefing – 7 May 2018

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Qantas Boeing 747-238B "City Of Canberra"
Qantas Boeing 747-238B “City Of Canberra” (Image Credit: Qantas Airways)

Hello and welcome to our Monday Briefing for the week beginning 7 May 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

IAG & Norwegian

What is going on between IAG and Norwegian?

In the three weeks that have passed since IAG announced it had acquired a stake in Norwegian, the group has tabled two proposals to Norwegian management, both of which have been rejected.

From the statements issued by IAG and Norwegian to date four things are clear:

a) Norwegian is prepared to entertain bids as it has appointed advisors
b) IAG has not yet submitted a formal takeover bid
c) IAG wants 100% ownership of Norwegian; and
d) IAG’s bid comes with, as yet undisclosed, conditions.

As Norwegian’s co-founders Bjørn Kjos and Bjørn H. Kise own a joint 27% stake in the airline, no takeover bid could go ahead without their consent.

However, it can be said with confidence that IAG has been studying Norwegian for years and time is on IAG’s side. There’s much more to come.

IAG Aircraft Order Imminent

At IAG’s quarterly results presentation last Friday, CEO Willie Walsh made clear his dissatisfaction at both Airbus over delays to the delivery of Airbus A320neo aircraft and Rolls Royce over engine problems with the Boeing 787.

In the same presentation, Willie Walsh described talks with Boeing and GE over long-haul aircraft orders as particularly constructive of late.

There are many things you can say about Willie Walsh, but no-one would argue he is a fool. Further discussions are planned to finalise future aircraft orders.

As at 31 December 2017, IAG had the following aircraft on order and options available:

Aircraft TypeFuture DeliveriesOptions
Airbus A32098128
Airbus A32121
Airbus A330-20043
Airbus A350-900/10004352
Airbus A38007
Boeing 787-8312
Boeing 787-926
Boeing 787-1012

Any order is likely to include more aircraft for LEVEL. IAG approved two more aircraft for LEVEL last week and IAG expects LEVEL to have a minimum of 15 aircraft by 2022.

As far as BA is concerned, will we ever see an order for more Airbus A380s? What about the Airbus A321 Long Range? Further orders for the Airbus A350 and new orders for the Boeing 777X are also likely to be under consideration.

British Airways: 100 Years In The Sky

Did you see the first episode of “British Airways: 100 Years In The Sky”?

The quality of air travel related television programmes has long been variable. However, British Airways: 100 Years in the Sky was impressive. It featured a lot of good quality archive footage with the production company mercifully resisting the temptation to rely on YouTube downloads. There was a broad range of well chosen and informed contributors. The second and final part is on Channel 5, this Tuesday at 21:00.

On a related note, the Secret Life Of The Long Haul Flight covering a Qantas flight from London to Sydney is available to watch on demand.

Trouble at Air France

As has been well documented, Air France has been beset by industrial action. This continues today, and tomorrow, Tuesday 8 May 2018.

Air France is no stranger to fractious industrial relations and strike action. Nor are many of its European rivals. However, this episode has now claimed the CEO of Air France-KLM. Jean-Marc Janaillac is to resign as CEO of Air France-KLM after Air France employees rejected a pay offer from the airline.

Whilst claims that this could be the end of Air France are a little far-fetched, Air France-KLM was the pioneer of consolidation in Europe. It is falling behind IAG and Lufthansa in terms of profitability, structural change and expansion.

Air France-KLM is due to acquire a 31% stake in Virgin Atlantic at some point and merge the two airlines respective joint-ventures with Delta. All with no CEO at present.

BA takes delivery of its 2nd refurbished Boeing 777

Last week, a second BA Boeing 777-200 (registration G-VIIR) returned to London Gatwick from Singapore after a six week refurbishment. A third aircraft (G-VIIO) was sent to Singapore for refurbishment last week.

The two refurbished aircraft are now principally operating flights from London Gatwick to Cancun, Kingston and Punta Cana. They have also operated occasional frequencies to Fort Lauderdale, New York JFK and Orlando.

Qantas to retire the Boeing 747

Qantas has confirmed it will retire its last remaining Boeing 747 aircraft by 2020.

The airline has ordered a further six Boeing 787-9 Dreamliner aircraft. It has of course been a long time since Qantas operated the Boeing 747 to Europe after it suspended Frankfurt in 2013.

Of more interest in London is whether Qantas ultimately orders either the Airbus A350 Ultra Long Range or Boeing 777X with sufficient range to operate London to Sydney non-stop.

Also of note this week:

Etihad is expected to cancel / defer orders for new wide body aircraft from Airbus and Boeing. (Reuters)

IATA is to launch a dedicated payment system for airlines (Financial Times)

On board a SWISS Boeing 777-300 delivery flight from Seattle. (SWISS Blog)

Late Post Publication Updates:

Lufthansa Group has ordered more aircraft for the group including two Boeing 777-300 for Swiss. It has also converted options for six Airbus A320neo aircraft into firm orders and ordered six Airbus A320ceo aircraft to offset delays to neo aircraft. (Lufthansa Group)

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