Welcome to our Monday Briefing for the week beginning 23 September 2019.
Attention this week is of course focused on Thomas Cook.
At the time of “going to press” there has been no announcement as to whether the group has been able to secure new funding to enable it to continue to trade. Though, this may come in the early hours of Monday morning or at 07:00 BST before the stock exchange opens.
Update: Following the compulsory liquidation of Thomas Cook the latest news and guidance is available from the Civil Aviation Authority.
BALPA Calls Off BA & Ryanair Pilot Strikes
Airline industrial disputes are supposed to follow a familiar pattern.
A trade union secures a strong mandate for industrial action, a strike is called, a deal is done at the 11th hour and the strike is called off.
Neither pilot disputes at BA and Ryanair have followed this pattern. BALPA has unilaterally called off strikes at both BA and Ryanair even though there is no prospect of a settlement with either airlines. Ostensibly, this has been made in good faith but ordinarily this is only done when both sides are close to agreement. A combination of longer 14 day notice periods for strike action and EU compensation rules means that the financial impact of the BA strikes was felt as soon as the strike was called.
It’s hard to see where BALPA goes from here in either dispute as neither airline seems minded to reach a settlement. Though, in the case of BA the dispute is obviously holding back a lot of announcements.
Virgin’s Heathrow Ambitions
Anyone who has followed Virgin Atlantic over its 35 year history is more than familiar with the airline announcing things that don’t come to fruition.
There was the order for 6 Airbus A380 aircraft with childrens’ play areas, gyms, showers and games arcades, the plan for private bedrooms on Airbus A340 aircraft, and all business class flights to New York.
It’s tempting therefore to dismiss out of hand its plan for a significantly enlarged route network at London Heathrow should a 3rd runway go ahead.
Virgin’s complaint is that IAG is too dominant at Heathrow, citing 77 “monopoly routes”. Virgin asks for Government intervention in the way new slots are allocated (which would otherwise leave IAG and Virgin to be treated the same as incumbent airlines) to create a “second force” hub airline. Readers may recall the Government tried to do this with British Caledonian, which was ultimately acquired by BA in the 1980s.
Arguably, Virgin lost any basis for complaint about IAG when it passed on at least three separate opportunities to acquire bmi. Even before IAG acquired bmi it had disposed of tranches of slots to BA, and Virgin had shown no interest.
Many of the proposed routes are cities that have previously been suspended by Virgin such as Accra, Cape Town, Chicago, Nairobi, Sydney, Tokyo and Vancouver. It is hard to see Virgin returning to Chicago when it has tried unsuccessfully to launch the route twice. It is also hard to argue that the travelling public is somehow worse off for having new direct links to cities such as Nashville and Pittsburgh, which BA has added in recent years.
To give Virgin credit it is launching/relaunching many non North American routes such as Mumbai, Sao Paulo and Tel Aviv. However, the route network it proposes would require a huge capital investment from its shareholders, and there’s little evidence of this being forthcoming.
BA Cracks Down On Ticket Manipulation
There has long been an industry dedicated to exploiting loopholes/mistakes in fares to take advantage of deeply discounted premium cabin fares offered in certain regions, or to maximise frequent flyer mileage accrual.
The activity can be problematic, particularly when a ticket is issued and not all sectors, usually the final one which is beyond the traveller’s intended final destination, are flown.
BA has announced a crack down on travel agents who “must not offer any ticketing or booking that does not reflect the genuine travel requirements of the customer.”
Consistent with our existent terms of appointment in the Travel Agency Addendum section 3.c, it is the Agent’s responsibility to ensure that ticketing or bookings are only in respect of customers’ genuine travel requirements and that Agent must not offer any ticketing or booking that does not reflect the genuine travel requirements of the customer.
Agent is prohibited from seeking to manipulate ticketing or booking in any way, attempt to circumvent journey controls for any reason including – but not limited to – marriage misuse, obtaining sold out inventory, etc…
From 01 October 2019, if this policy is breached an Agency Debit Memo will be raised per misused coupon and value will differ per cabin.
Also of note this week:
Rolls-Royce has advised that the number of grounded Boeing 787 Dreamliner due to engine maintenance requirements will now not reach single digits until the first quarter of 2020.
SAS unveils its new livery. (SAS)
Late post publication updates:
[Reserved for updates throughout the day]
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