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Welcome to our Monday Briefing for the week beginning 1 October 2018, summarising the main developments in air travel over the past week.
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London – Hong Kong
Hong Kong is a destination that BA has, through its predecessor airlines Imperial Airways and BOAC, served for more than 80 years.
The first flight from London to Hong Kong, on 14 March 1936, took ten days, required seven aircraft, and stopped at 24 cities en route.
Today, the two cities with significant economic and historic links, are served direct by three airlines using some of the most advanced commercial aircraft.
It’s a prestigious route for BA. When BA launched fully flat beds in Club World nearly 20 years ago, Hong Kong was the second route to fly with the new cabin after New York JFK. It was the second route after Los Angeles to be operated with the Airbus A380 in 2013.
BA has long faced a formidable competitor in the form its Oneworld alliance partner Cathay Pacific. It’s an airline hailed for its attentive service and vast lounge complex in Hong Kong. In recent years, Cathay has gained a number of competitive advantages. After its initially unpopular business class bed, criticised for being too narrow, it has a seat with direct aisle access. It has also added premium economy and widely acclaimed business and First Class lounges at Heathrow Terminal 3.
It dwarfs BA on frequency at Heathrow, flying five times a day, in addition to daily flights from Gatwick. Aided by the Airbus A350, Cathay Pacific has also added many destinations in Europe including Barcelona (seasonal), Brussels, Dublin, Madrid and Zurich.
There are signs this is hitting BA hard. A cursory scan of flights shows substantial differences between business class fares between BA and Cathay Pacific. Last week, BA also announced that it is closing its cabin crew base in Hong Kong with the loss of more than 80 jobs.
Hong Kong is a route BA has no option but to make work. An equivalent of its joint-business with Japan Airlines which enables easier access to local corporate clients and distribution networks, even if Cathay Pacific were so minded, would not be allowed by competition authorities.
Some measures such as new lounges at Heathrow Terminal 5 and a new Club World seat will come, but don’t be surprised to see more activity to improve the financial performance of this route.
Air France-KLM
Benjamin Smith is now two weeks into his role as CEO of Air France-KLM and has been doing a series of media interviews.
He will also assume the role as CEO of Air France for an interim period after its CEO Franck Terner resigned last Thursday. Top of his “To Do” list is addressing the seemingly intractable problem of fractious industrial relations at Air France, particularly with its pilots.
Another matter is Joon. Whilst Air France-KLM is not alone in deploying multiple brands to benefit from a lower cost base, it is hard for even those in the industry to understand the brand “Joon” which operates alongside Air France from Paris Charles de Gaulle. It is not a separate airline. Flights are operated by Air France pilots with cabin crew under different terms and conditions. The delineation between Air France and Joon is not clear. Last week, Air France announced that seven routes from Paris Charles De Gaulle would transfer to Joon from next summer. These are Madrid, Manchester, Prague and Stockholm and Saint-Marten and Quito.
50 Years Of The Boeing 747
The Boeing 747 celebrated its 50th anniversary yesterday.
The first Boeing 747-100 made its first public appearance before the world’s press and representatives of the 26 airlines that had ordered the aircraft at a custom-built assembly plant at Paine Field in Everett, Washington, on 30 September 1968. The first flight took place on 9 February 1969. It entered passenger service on 21 January 1970, operated by Pan Am from New York to London Heathrow.
Whilst many Boeing 747 operators such as Cathay Pacific, Singapore Airlines and United have retired the aircraft, it will still have a presence at Heathrow for many years to come as BA is not expected to retire the aircraft until 2024. Bloomberg has a collection of images from the 747’s history.
In case you missed it:
BA relaunches London Heathrow – Osaka (London Air Travel)
Ozwald Boateng to design new BA uniform. (London Air Travel)
BA launches London City – Munich. (London Air Travel)
BA prepares to retire the Boeing 767. (London Air Travel)
Also of note this week:
Latin American leaders are embarrassed by their aircraft. (The Economist)
Lufthansa shifts aircraft and routes between Frankfurt and Munich. (Lufthansa)
Virgin Atlantic goes behind the scenes of its latest TV ad. (Virgin Atlantic)
Former Concorde pilot David Leney, an Obituary. (The Times)
Late Post Publication Updates:
[Reserved for updates during the day.]
Ryanair has lowered its profit guidance from €1.25bn – €1.35bn to €1.10bn – €1.20bn. Ryanair has cited higher fuel prices and the cost of disruption due to strike action, and its impact on forward bookings.
Norwegian confirms it will launch domestic operations in Argentina. It will launch two routes from Buenos Aires to Cordoba and Mendoza from 16 October 2018. Iguazu and Neuquen follow on 19 November. Bariloche and Salta launch on 3 December. (Norwegian)
Primera Air suspends all flight operations. (London Air Travel)
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