London Air Travel's Monday Briefing - 4 June 2018

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Fiji Airways & Oneworld Connect (Image Credit: Oneworld Connect)

Hello and welcome to our Monday Briefing for the week beginning 4 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

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Oneworld introduces “Oneworld Connect” membership

Ever since International Airlines Group acquired Aer Lingus there has been the perennial question as to when the airline would rejoin the alliance after it left in 2007.

In spite of early promises that Aer Lingus would rejoin the alliance, there appears to be no evidence of any imminent activity.

Perhaps we now have an answer. On Sunday 3 June 2018 at the IATA AGM in Sydney (fortuitously for the delegates timed to coincide with Vivid Sydney), Oneworld announced a new form of membership known as “Oneworld Connect”.

Oneworld Connect places significantly lower obligations on members. They only have to offer priority check-in and boarding to all Oneworld frequent flyers.

Other Oneworld benefits such as mileage earning and redemption and lounge access will only be offered to customers of “sponsoring airlines”, of which there must be at least three. More benefits can be offered by agreement with individual airlines.

This is clearly a tacit admission that Oneworld has gone as far as it can in securing new members. There are lots of airlines which with Oneworld members have varying levels of co-operation. Not just Aer Lingus. But also its fellow IAG subsidiary Vueling. Other potential candidates could include Air Italy, Alaska Airlines, Bangkok Airways and Royal Air Maroc.

It has also been confirmed that BA and Fiji Airways are to explore areas for co-operation. BA and Fiji Airways have already sought regulatory approval for BA to codeshare on Fiji Airways flights from Los Angeles and San Francisco to Fiji. An announcement about this could come as soon as this week.

IAG Negotiations with Airbus

When IAG released its first quarter results last month, Willie Walsh confirmed that the group was in discussions with aircraft and engine manufacturers on a new aircraft order.

It is expected that the order will be announced in the next 12 months. Talks with Boeing and General Electric were described as “particularly constructive”. And now we can see why.

Bloomberg reports that IAG has suspended talks with Airbus over an order for new Airbus A380s.

Airlines of course have regular discussions with aircraft manufacturers and conversations are leaked for a reason.

The real story here is that BA/IAG do want more Airbus A380 aircraft, but clearly not at any price.

IAG has previously mooted leasing second hand Airbus A380s, but this has evidently not come to anything. So now it’s back to looking at new aircraft. IAG has options for a further seven aircraft. Whilst Willie Walsh has suggested Airbus A380s could be deployed at Aer Lingus and Iberia, this seems unlikely. Aer Lingus doesn’t even have plans to introduce the Airbus A350.

The A380 is clearly serving BA well on major trunk routes and there is scope to add more year round capacity to more routes.

On a related note, BA took delivery of its 18th Boeing 787-9 Dreamliner (registration G-ZBKS) and its 27th Dreamliner aircraft in total on 31 May 2018. It is due to complete its inaugural scheduled passenger flight to New Orleans today. It will no doubt provide some welcome additional capacity as it addresses engine issues with the rest of is Dreamliner fleet.

Iberia A350

Iberia’s first Airbus A350-900 aircraft looks its first test flight last week.

Like the latest deliveries of the Airbus A320Neo to BA, the specification of this aircraft has been carried out by IAG to standardise as much of the aircraft across IAG airlines as possible.

Therefore, when the aircraft interior is revealed, it should provide some clues as to what to expect when BA takes delivery of the Airbus A350-1000 next year. At least, in terms of economy, premium economy and in-flight entertainment. The one thing you won’t see is BA’s New Club World seat. This will be different to Iberia’s and, indeed, it has not yet been finalised.

What next for Virgin at Gatwick?

Virgin Atlantic announced its summer schedule for Manchester last week, with a new route to Los Angeles and more flights to Las Vegas.

Manchester, to use the parlance of Virgin’s 49% shareholder Delta, is clearly becoming a “focus city”. There’s less positive news at Gatwick where Virgin has suspended Cancun and transferred Las Vegas to Heathrow. Could other routes such as Barbados follow?

It’s worth recalling that a spin-off of the Virgin Holdays operation at Gatwick has been considered in the past. (The Sunday Times). When Sir Richard Branson’s Virgin Group sells part of its stake to Air France KLM, Delta will be the single largest shareholder, and may prompt another strategic review.

Also of note this week:

Following local press reports, the Accor Hotels Group has confirmed exploring buying the French State’s share of Air France-KLM. (AccorHotels)

Another chapter in the intense corporate rivalries in Australian aviation: Air New Zealand and Qantas are to codeshare on each other’s respective domestic networks, after Air New Zealand ends co-operation with Virgin Australia. (Qantas)

The Secretary of State for Transport, Chris Grayling, is expected to table a National Policy Statement on the 3rd runway at Heathrow this week, leading to a vote in the House of Commons. (Financial Times)

SWISS looks at two years of operating the Bombardier C Series aircraft. (SWISS)

Late Post Publication Updates

BA has confirmed that Qatar Airways will operate selected BA flights to Delhi, Kuwait and Muscat from June to August. (London Air Travel)

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London Air Travel’s Monday Briefing – 4 June 2018