Welcome to London Air Travel’s Monday Briefing for the week beginning 10 May 2021.
BA launched its first major advertising campaign in two years last Thursday, one day before the UK government announced its “green list”. If you’ve not already seen it there’s a dedicated landing page on ba.com
These campaigns are planned well in advance and it is likely the airline thought it would be offering a more substantial schedule in late May than several flights a day to Faro. Speculation that the US was about to reopen to UK travellers was clearly wide of the mark.
IAG Keeps Its Options Open On Gatwick
When IAG’s management team were asked at its quarterly results presentation about BA’s plans to return to Gatwick airport, CEO Luis Gallego gave some rather cryptic comments.
Gatwick airport was described as having “strategic value” but IAG needed “to be flexible and competitive there” with the demand profile said to have changed post COVID-19 – BA is no longer competing against Norwegian and Virgin Atlantic at Gatwick. Luis added that the group is analysing the different options available to it.
When flights restart will depend on whether there is a further dispensation on “use it or lose it” slot rules for the winter season where the UK can now set its own rules.
If not, then IAG, and it’s clear that these decisions are being made above BA, will have to decide on its future at Gatwick as preserving slots at Heathrow will have to take priority for BA.
It is hard to see IAG replacing BA at Gatwick with another brand in the group. Vueling, which has had a somewhat scattergun approach to launching routes in the UK, and has not really gained any traction. LEVEL is also an unknown quantity and has retreated from short haul markets in Amsterdam and Vienna. There would also be much less synergy with the BA Executive Club and BA Holidays.
History has shown that when slots are ceded to rivals at slot constrained airports it is very hard to regain a presence. 20 years ago easyJet had next to no presence at Gatwick. By downsizing at the turn of the century and allowing easyJet to acquire its former franchise partner GB Airways and Flybe’s slot portfolio, BA played a large part in enabling it to become the dominant airline. Only until relatively recently did BA seek to regain momentum by buying Monarch’s former slots.
There were already some signs of a change in approach. The planned transfer of routes to Accra, Doha and Islamabad from Heathrow to Gatwick do not fit with BA’s historic approach of focusing on point to point leisure traffic.
BA May Restart Airbus A380 Flights Later This Year
It has been known for some time that BA has no plans to follow many other airlines and retire the Airbus A380 aircraft early.
IAG did indicate last year that up to 4 of its 12 strong fleet could be put in to storage for the medium term. At last week’s results announcement, BA CEO Sean Doyle said the aircraft could return to service later this year when demand recovers.
Whilst we won’t be seeing BA’s A380s flying to Hong Kong or Singapore anytime soon, with a high premium seating configuration, it clearly sees the aircraft as a necessary part of its fleet now the Boeing 747 has been retired.
Also of note this week:
A detailed look at Virgin Atlantic’s accounts for 2020 and a good primer on how to read a set of airline financials. (Gridpoint Consulting)
The Australian Competition & Consumer Commission plants to block a proposed partnership between Japan Airlines & Qantas. (Sydney Morning Herald)
Can flying go green? Asks Business Daily (BBC World Service)
What happened behind the scenes when the doors of Claridges hotel were closed due to COVID-19. (Sunday Times Magazine)
Late post publication updates:
[Reserved for updates throughout the day]
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