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Welcome to our Monday Briefing for the week beginning 8 October 2018, summarising the main developments in air travel over the past week.
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Primera Air and Etihad
Two events occurred last week. One was reported very widely. Another much less so outside of the travel press.
Low cost airline Primera Air suddenly suspended operations on Monday 1 October. Thousands of passengers were stranded as were many of its now redundant employees.
The other was a relatively trivial detail that Etihad has transferred it lounge at London Heathrow Terminal 4 to No1 Lounges. The airline expects to transfer all of its lounges outside of Abu Dhabi to third party operators. The significance of this nothing is off the table as Etihad seeks to shore up its finances. That’s if it remains an independent airline.
What could the two stories possibly have in common?
It was clear that to anyone with a casual knowledge of the airline industry that both were pursuing unsustainable strategies.
Anyone who had read the briefest of histories about Swissair (see below) could see that Etihad buying minority investments in troubled European airlines, all with different alliance allegiances and management teams, was doomed to fail.
Alitalia had been recapitalised numerous times before Etihad bought a stake in the airline. It is notorious for its recalcitrant workforce. It can be said with confidence that other European airline groups would have looked at buying Air Berlin. None had chosen to open the cheque book.
Yet Etihad was widely hailed as transformational airline that was “reimagining travel”. Events such as the launch of the Residence on its Airbus A380s generated huge amounts of PR, with few wondering who would actually be prepared to pay for it.
Primera Air’s launch of transatlantic operations had got off to a very troubled start. Delays in the delivery of new aircraft meant that all long-haul flights from Birmingham were cancelled. It also had to lease aircraft to cover some flights from Stansted.
However, that did not deter Primera Air in pursuing a plainly implausible expansion with new transatlantic bases in 2019 planned in Berlin, Brussels, Frankfurt and Madrid. Consider that when Sir Richard Branson launched Virgin Atlantic with a single route from Gatwick to Newark, it took six years to get to the four scheduled routes that Primera Air launched in one year.
Some airlines, not accustomed to the transparency that comes with public ownership, do not appreciate scrutiny of their affairs. The survival of all airlines ultimately hinges on the confidence of their customers and suppliers. They depend on the cashflow benefit of revenue from forward bookings and the credit terms of their suppliers. If either one is lost, it is game over.
There would obviously consequences for publications that make unsubstantiated claims. However, when stunts like low lead in fares from Norwegian’s now withdrawn transatlantic routes from Edinburgh are given extensive free coverage, the press at large is not serving the travelling public by challenging the sustainability of airline strategies.
The Airline Of Switzerland
SWISS celebrated 15 years in its current form last year.
The airline was born from the ashes of Swissair in 2001. Swissair had collapsed amid acrimony under the burden of a $9billion debt pile and an over-aggressive expansion plan having acquired minority stakes in European airlines such as Sabena and Air Liberte (see above).
It relaunched in 2002 with a new brand identity developed by Winkreative, an agency headed by Tyler Brûlé who founded Wallpaper* magazine, which he was to shortly leave. Tyler Brûlé declared “It’s high time to bring a little glamour back into the airline business.” Winkreative produced a ten point plan to turn around its fortunes which included “a sexy timetable”.
This wasn’t enough. Talks to join the Oneworld alliance and co-operate with BA did not come to fruition, arguably BA’s greatest missed opportunity after not merging with KLM. It was subsequently acquired by Lufthansa and has flourished ever since.
Werner Vogt has written a history of the airline. It is only available in German. SWISS has however marked its publication with a potted history of the airline. (SWISS)
BA Long-Haul Aircraft Refurbishments
A quick update on BA long-haul aircraft refurbishments.
A fifth Boeing 777-200 aircraft, registration G-VIIT, has returned from its “densification” and refurbishment in Singapore. It re-entered service at Gatwick flying to Orlando yesterday. A sixth aircraft, G-VIIU, flew from Gatwick to Singapore for refurbishment late Sunday evening.
The first of BA’s 52 Club World seat Boeing 747s to receive a full interior refurbishment and new in-flight entertainment system, aircraft G-CIVO, has been at BA’s maintenance base in Cardiff for over a month. It should return to service at Heathrow this month and operate on routes such as Accra, Denver, Las Vegas, Miami, Nairobi and Phoenix. There are 18 52 Club World seat Boeing 747s in service at the moment. However, many will not be fully refurbished due to imminent retirement.
Qantas looks back at the Boeing 747 Special Performance
As was widely reported the Boeing 747 recently celebrated its 50th birthday.
Qantas looks back at the short-lived Boeing 747 Special Performance. Also known as 747SP for short and colloquially at Qantas as the “Jumbo Pocket Rocket”. It entered service in 1975. Shorter than the 747-100, but with a longer range, just 45 were made.
Qantas took delivery of two aircraft, VH-EEA and VH-EAB. They did serve their purpose flying trans-pacific routes and to Asia. Just a small number of aircraft remain in service. One owned by the Royal Flight Of Oman flew in to Stansted in July of this year. (Qantas)
In case you missed it:
Air Belgium to operate select Heathrow – Dubai flights for BA. (London Air Travel)
BA pares back its much vaunted new Club World meal service. (London Air Travel)
BA opens its newly refurbished First Class lounge at New York JFK Terminal 7. (London Air Travel)
BA suspends London Heathrow – Murcia. (London Air Travel)
Also of note this week:
Cathay Pacific tweaks its European network, suspending Copenhagen and increasing frequencies to Frankfurt and Madrid. (Cathay Pacific)
Has Ryanair chief Michael O’Leary lost his cost-cutting touch? (The Financial Times)
Late Post Publication Updates:
[Reserved for updates during the day.]
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