BA Plans “Meaningful” Return Of Schedules In July

British Airways plans to restart normal schedules in July. However, flights will remain significantly reduced throughout 2020.

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British Airways Boeing 747 G-BNLY "City Of Swansea", Dublin (Image Credit: British Airways)
British Airways Boeing 747 G-BNLY “City Of Swansea”, Dublin (Image Credit: British Airways)

British Airways plans a “meaningful” return to normal flight schedules in July.

Its parent company IAG has given an update on its plans for the rest of the year at the presentation of its first quarter results.

Overall, the group is in a relatively strong financial position with €6.4 billion of cash and €3.6 billion of available credit facilities as at 30 April 2020. It is inevitably reducing its fleet and schedules, but less so than many other airlines.

Flight Schedules

Overall, IAG airlines will operate reduce planned capacity by 55% in the third quarter of this year, and 30% in the final quarter of this year.

This is significantly less than Air France-KLM which is expects to reduce capacity by 80% in the third quarter.

IAG is undertaking research of both leisure and corporate passengers as to what will encourage passengers to start flying again.

Whilst IAG supports measures such as temperature checks at airports and the wearing of face masks, it does not plan to introduce social distancing measures on aircraft such as the blocking of middle seats.

On the question of BA’s long-term presence at Gatwick, this appears to be dependent on the outcome of the planned restructuring of BA, as referred to below. Other than Gatwick, nothing was specifically said about the medium-term impact of COVID-19 on BA’s route network.

It will take time to rebuild schedules as many aircraft have been stored at airports away from BA facilities and will need to undergo maintenance checks before they return to service.

British Airways Fleet Changes

As expected, BA is to accelerate the retirement of aircraft and defer the delivery of new aircraft.

BA is to accelerate the planned retirement of two Boeing 747 aircraft in 2020. It had originally planned to reduce its Boeing 747 fleet from 31 to 25 by the end of the year.

BA had planned to retire its last Boeing 747 aircraft in February 2024. However, this may be brought forward. Please see here for IAG’s plans at its last Capital Markets Day and here for BA’s fleet plans at the start of the year.

Interestingly, nothing was said about the Airbus A380 which is a relatively poor performer in the current climate due to its high passenger capacity and low cargo capacity.

IAG Fleet Plan May 2020 (Image Credit: International Airlines Group)
IAG Fleet Plan May 2020 (Image Credit: International Airlines Group)

At an IAG level, the group plans to defer the delivery of 68 aircraft between now and 2022. This includes 11 long-haul aircraft and 57 short-haul aircraft – this does not affect IAG’s Letter of Intent to acquire the Boeing 737 MAX which remains in place. The reason why relatively few long-haul aircraft are being deferred appears to be because they are already financed.

IAG will also return 20 leased in aircraft in 2020 and has the flexibility to return up to 96 leased aircraft in 2021 and 2022. This could include some leased Boeing 777 aircraft at BA.

Aircraft Seating Changes

British Airways is also looking at the seating configuration of aircraft.

This will affect which existing aircraft are selected for retirement and how new aircraft are configured.

Some BA long-haul aircraft have relatively very high densities of business class seating, with up to 86 Club World seats on some Boeing 747 aircraft.

BA had also planned to take delivery of some Airbus A350-1000 by 2022 and 18 Boeing 777-9 aircraft with First Class by 2023.

BA is also looking to convert some Boeing 777 passenger aircraft into cargo-only aircraft.

British Airways Restructuring

As was announced in late April, BA is in consultation with its trade unions about a restructuring at the airline which could lead to up to 12,000 job cuts.

This will last a minimum of 45 days. There has been speculation as to BA’s motives in this and questions as to why IAG has not raised funds from the UK Government’s Coronavirus Corporate Finance Facility (CCFF). IAG has in fact raised £300m from this facility, which it says is the maximum available to it.

As is standard practice, IAG declines to give a running commentary whilst negotiations with trade unions are underway. However, IAG has said it is not the case that BA has been singled out for restructuring. Restructuring will take place across all IAG airlines. The specific BA announcement was made due the requirements of UK employment legislation. It intends to comply with UK employment legislation and reach an agreement with its trade unions.

However, Willie Walsh did not leave anyone in any doubt that he considers a period of significantly reduced demand over the next few years will necessitate a restructuring by all airlines in the industry. As we have already seen at Norwegian and Virgin Atlantic, this will mean substantial job cuts and, for BA, changes to working practices.

On the question of state support, whilst IAG supports the use of general government measures to support businesses when in a situation through no fault of their own, it does not support specific bailouts for poorly performing airlines.

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BA & Qatar Airways Approval For Australia Joint-Business

British Airways and Qatar Airways have received regulatory approval to operate a joint-business between Europe and Australia.

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Heathrow Airport, Terminal 5C, (Image Credit: Heathrow)

British Airways and Qatar Airways have received final approval from the Australian Competition & Consumer Commission (“ACCC”) to operate a joint-business in respect of flights between certain cities in Europe and Australia.

You could be forgiven for thinking the two airlines already had such a joint business for Australia, but that is not the case.

Whilst BA and Qatar have operated a joint business for some years, this only currently covers flights from the UK to Doha, and many destinations beyond Doha in Africa and Asia.

BA and Qatar have operated a codeshare for many UK – Australia routings such as Manchester – Doha – Melbourne or Cardiff – Doha – Perth which can be booked through BA as a codeshare.

The approval from the ACCC will allow BA and Qatar to take this beyond a codeshare and co-ordinate schedules and fares on a number of routes from Western Europe via Doha to certain cities in Australia which are Adelaide, Canberra, Melbourne and Perth.

London – Sydney is not included in the joint business as BA serves this with its own aircraft, at least for now. Approval was sought before the outbreak of COVID-19, which is likely to have a significant impact on BA’s route network and timetable in the medium term.

Regulatory approval will take effect from 29 May 2020 and will last until 29 May 2025.

Whilst in theory regulatory approval allows BA and Qatar to co-ordinate schedules on these routes, it is unlikely we would see BA flying to Australia via Doha. The main driver behind this is for BA to take advantage of Qatar’s network to Australia from Europe and for Qatar to take advantage of BA’s distribution network.

The new joint business does not seem to disturb BA’s existing codeshares to Australia via Asia with Cathay Pacific, Malaysia Airlines and Qantas.

Full details of the authorisation are available from the Australian Competition and Consumer Commission.

Update: BA has confirmed that the expanded joint business will take effect from 29 May 2020.

British Airways’ Africa Franchise In Business Rescue

British Airways franchise partner Comair has entered a formal Business Rescue Process in South Africa.

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Comair Boeing 737 Aircraft Matazo Kayama "Waves And Cranes" Project Utopia Livery
Comair Boeing 737 Aircraft Matazo Kayama “Waves And Cranes” Project Utopia Livery (Image Credit: British Airways)

British Airways’ franchise partner in Africa, Comair, has entered a Business Rescue Process.

This is a formal restructuring process, similar to Chapter 11 in the United States. Business Rescue Practitioners have been appointed to oversee the running of the company and a restructuring, with the aim of avoiding a liquidation.

Originally founded in 1946, Comair also operates the airline brand Kulula and SLOW lounges in Africa. Its airlines are currently grounded and it does not expect to resume operations until October 2020 at the earliest.

British Airways owns a 11.49% stake in Comair. It became a BA franchise in 1996. It operates routes to destinations in South Africa, Mauritius, Namibia, Zambia and Zimbabwe from its main hub at Johannesburg with a fleet of Boeing 737 aircraft. 

The BA franchise is clearly very important to BA’s brand presence in South Africa and providing connecting traffic to and from BA’s long-haul routes to London. Comair is one of two remaining BA franchise partners. The other being SUN-AIR of Scandinavia.

Comair’s state owned rival South African Airways is expected to be liquidated with a new airline formed.

Comair has issued the following statement. Note the comment from its CEO Wrenelle Stander about reviewing joint-ventures. Whilst Comair’s BA franchise is highly regarded, it is of course at liberty to end its franchise agreement with BA.

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BA Extends Exec Club “Reward Flight Saver” To New York

British Airways is now offering long-haul economy Avios redemptions to New York JFK with a flat cash fee of £100.

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New York Skyline
New York Skyline (Image Credit: London Air Travel)

This is one to file under “Not sure how long this has been running, but only just noticed it”.

British Airways’ “Reward Flight Savers” have long been a popular means for members of the Executive Club to redeem Avios on short-haul flights.

Prior to their introduction, redeeming Avios on short-haul flights was considered practically worthless. This was because the taxes and fees were so high, you might as well just purchase a cash ticket with the benefit of earning Avios instead of spending it.

Under a Reward Flight Saver a passenger redeeming Avios on a short-haul flights simply pays a flat cash fee from £1 upwards with any taxes, fees and surcharges borne by BA.

It instantly transformed a short-haul redemption flight from one of the worst to one of the best uses of Avios.

Long-haul economy redemptions have been considered similarly poor value because again, taxes fees and surcharges represent an increasingly high proportion of the overall ticket price.

As you can see from the screen shot below, an off-peak economy long-haul redemption from London Heathrow to Boston costs a minimum of £226.35 in taxes and surcharges and 26,000 in Avios. A cash ticket for the same flights with checked luggage would cost around £385 and earn Avios.

British Airways Economy Redemption London Heathrow – Boston

Reward Flight Savers To New York JFK

BA has now extended the Reward Flight Saver concept to long-haul economy flights.

At present, it only applies to BA operated flights to New York JFK. It is also only available to UK based members of the Executive Club.

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British Airways Prepares To Restructure Post COVID-19

BA has begun to consult with its trade unions on a redundancy exercise which may affect up to 12,000 BA employees.

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British Airways Coat Of Arms
British Airways Coat Of Arms (Image Credit: British Airways)

International Airlines Group, the parent company of British Airways, and Aer Lingus, Iberia, LEVEL and Vueling has released its preliminary first quarter results for 2020.

Total revenue in the first quarter fell 13% to €4.6 billion compared to €5.3 billion last year. IAG reported a loss before exceptional items of €535 million compared to a profit of €135 million last year.

IAG has also taken an exceptional charge of €1.3 billion. This is due the ineffectiveness of fuel and foreign currency hedges for 2020 due to over-hedging. Put simply, this means IAG has not been able to benefit from significant falls in fuel prices in recent weeks.

IAG airlines have reduced capacity by nearly 95% in April and May. The group has not announced any capacity plans for June which are subject to both the easing of country lockdowns and the lifting of travel restrictions.

Industry views on how long it will take for demand to return to 2019 levels vary widely.

Most optimistic is Michael O’Leary who believes that, with significant discounting, demand will recover quite quickly. Many airlines believe it will take around 3 years for demand to recover and demand will remain subdued well in 2021.

IAG has said today that it expects it to take several years for demand to return to 2019 levels.

British Airways Restructuring

British Airways has begun a consultation with its trade unions on a redundancy exercise.

This may affect up to 12,000 BA employees. To put this into context, BA has approximately 40,000 employees. 22,626 employees were furloughed in April.

Whilst this will clearly have a significant impact on the livelihoods of many BA staff, the number of 12,000 is a likely worst case scenario to open negotiations with BA’s trade unions. It is likely that this will be achieved through voluntary redundancy as much as possible which is a “red line” for trade unions.

BA is also likely to be receptive to other cost savings suggestions, particularly productivity improvements.

It also points to a significant reduction in capacity in the coming years and, in turn, many changes to BA’s airports, route network and fleet.

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British Airways Extends Coronavirus Rebooking Policy

All passengers due to travel with British Airways up to 31 July 2020 can exchange their ticket for a voucher for travel up to 30 April 2022.

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BA Airbus A319 aircraft at London Heathrow (Image Credit: British Airways)
BA Airbus A319 aircraft at London Heathrow (Image Credit: British Airways)

British Airways has today, Tuesday 28 April 2020, extended its flexible rebooking policy for all passengers due to fly with the airline in the coming months.

Passengers who were due to travel up to Sunday 31 May 2020 and were not able to travel had the option to exchange the value of their booking for a voucher for future travel.

This has now been extended to all passengers who were due to travel up to Friday 31 July 2020. BA’s new rebooking policy is likely to be a precursor to a substantial schedule reduction in June and July.

Passengers due to fly up to Thursday 31 December 2020 who had booked under BA’s “book with confidence” policy from Tuesday 3 March 2020 also have the flexibility to change the date or destination of their booking.

Voucher Extensions

In addition, all new and existing vouchers can now be used as payment for a new booking for travel up to and including 30 April 2022.

Previously, vouchers had to be used within 12 months of the original travel dates.

Refunds

If your flight is cancelled you are entitled to a full refund.

However, you will need to call BA directly to secure this cannot be done online. Note BA will not allow vouchers to be subsequently converted into cash refunds.

The above is only intended to be a short summary of BA’s policy.

For the latest information on Coronavirus please see this page on ba.com.

Please review this very carefully, including the terms and conditions for flight and holiday bookings, before making any changes to your bookings. These policies are also subject to change at short notice.

BA is currently operating an extremely limited schedule from London Heathrow Terminal 5.

Schedules currently indicate that flights at London City and London Gatwick will resume from Friday 22 May 2020. This is subject to change. It is expected that schedules will resume very gradually throughout the year and into 2021.

A History Of British Airways Advertising – Part 10

A look at British Airways’ advertising over the past 50 years as BA turns to story-telling on social media and marks its centenary year.

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"To Fly. To Serve. Today. Tomorrow."
“To Fly. To Serve. Today. Tomorrow.” (Bartle Bogle Hegarty for British Airways)

Welcome to the tenth and final part of our look at some of the most influential and noteworthy BA advertising of the past 50 years.

In our final part, we’re well into the era of social media platforms such as Twitter, Instagram and YouTube.

These platforms have are a double-edged sword for airlines. They enable airlines to reach a mass audience without buying expensive advertising space, but they have to be shared with the public at large. Airlines are at the mercy of instantaneous and reactive judgements by audiences.

“Today, Tomorrow”

This advert from 2013 was an extension of BA’s brand relaunch “To Fly. To Serve.” but with a much more contemporary feel.  

The advert debuted ahead of the launch of the Boeing 787 Dreamliner and Airbus A380 at London Heathrow.  It features a passenger travelling through Terminal 5 to board a Boeing 787 Dreamliner.  

The advert uses a “micro to macro” style of filming, featuring close up shots of the details of flying, panning to wide shots of the aircraft in motion.

The film is directed by Martin Krejci, with cinematography from Anthony Dod Mantle and features the soundtrack “Experience” (Starkey Remix), by Ludovico Einaudi.

“The Magic Of Flying”

“Look Up” was a campaign developed by the interactive agency OgilvyOne in 2013.

Interactive billboards in Chiswick and Piccadilly Circus would respond as a BA aircraft flew over it. OgilvyOne had installed antennae on nearby buildings which could identify overflying aircraft. Using custom-made software it would identify which of those aircraft were operated by BA.

A child would then point to the aircraft in the sky and the billboard would display its actual flight number and origin, highlighting the breadth of destinations served by BA. 

As well as generating a significant number of visits to the BA website and impressions on social media, the campaign won multiple industry awards.

“Red Bus”

The marketing of airlines to overseas visitors can often descend into cliched stereotypes.

Here’s a short film that looks at the start like it’s about to do that, but doesn’t.

Rooftop Cinema Club

Not strictly an advert, but a highly effective trailer shown before screenings at the Rooftop Cinema Club.

Continue reading “A History Of British Airways Advertising – Part 10”

A History Of British Airways Advertising – Part 9

A look at British Airways’ advertising over the past 50 years as BA seeks to recover from the financial crisis, delves into the past to relaunch its brand identity and tells passengers not to fly.

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British Airways "Taxi" Advertisement, 2012
British Airways “Taxi” Advertisement, 2012 (Image Credit: Bartle Bogle Hegarty for British Airways)

Welcome to the ninth part of our look at some of the most influential and noteworthy BA advertising of the past 50 years.

We turn towards the end of the first decade of the century. BA seeks to recover from the global financial crisis, delves into the past to relaunch its brand identity and tells passengers not to fly.

Opportunities

The collapse of Lehman Brothers in September 2008 had a huge impact on BA.

The airline’s financial lifeblood, long-haul premium traffic, fell away sharply.

BA swung from a profit of £922m in 2008 to a loss of £401m in 2009. There were even questions as to whether the airline would survive in its current form.

Here is a very softly spoken advertising campaign BA ran 12 months after the collapse of Lehman Brothers. 

It featured 9 films in total gently encouraging both business and leisure passengers to fly and pursue new opportunities around the world such as Mumbai Fashion week and the migration of wildebeest across the Serengeti.

The campaign was noteworthy in that apart from a reference to BA’s route network at the end of the voiceover, it does not make any specific reference to any relative benefits of flying BA, nor does it feature any visuals of BA aircraft or cabins.

Aviators

In September 2011, BA relaunched its brand by reintroducing the slogan “To Fly. To Serve.” which had been a long part of BA’s heritage. 

This advert “aviators” focuses the role of BA and its predecessor airlines in aviation history right from the very first flight on 25 August 1919. It is notable for its focus on the “hardware” of aviation rather than the softer aspects you usually see in advertising.

Continue reading “A History Of British Airways Advertising – Part 9”

A History Of British Airways Advertising – Part 8

A look at British Airways’ advertising over the past 50 years as BA ends its long-standing relationship with Charles and Maurice Saatchi.

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"Glide Through London Heathrow Terminal 5" Advert 2008
“Glide Through London Heathrow Terminal 5” Advert 2008 (Image Credit: Bartle Bogle Hegarty for British Airways)

Welcome to the eighth part of our look at some of the most influential and noteworthy BA advertising of the past 50 years.

We’re well into the 21st century as BA learns to embrace the internet, ends its long-standing relationship with Charles and Maurice Saatchi and moves to Terminal 5 at London Heathrow.

“Have you clicked yet?”

It may seem strange to think now, but when the internet first entered the public consciousness in the 1990s, airlines didn’t know what to do with it.

One of the most hyped websites of the late 1990s dot.com boom was lastminute.com which sells discounted flights, hotel rooms, and event tickets with late availability. 

And that’s how BA, which of course had well established distribution channels through travel agents, viewed the internet – a place for distressed inventory.

It took a while to get there but after securing the domain ba.com from Bell Atlantic, there was a realisation that it could be used as a primary distribution channel. It also allowed for self-service options so passengers arrive at the airport “ready to fly”.

“When the world zigs, zag”

In 2005, BA ended its relationship with Charles and Maurice Saatchi.

Bartle Bogle Hegarty secured the BA advertising account after a new tendering process that M&C Saatchi seemed destined to lose.

M&C Saatchi did not let go quietly. They took out a double page advert in The Times the following day championing their work for BA and advising that they are now “taking new airline bookings”.

They reportedly revelled in advertising industry gossip that BBH was initially having difficulty pleasing BA. Allegedly a letter was drafted headed “British Airways. Serves You Right.” with the text “Please feel free to use the strapline in your upcoming advertising. Alternatively, simply stick it to the wall and stare at it for the next few months/years.”

In 2007, Saatchi also remade “The Face” advert for the now defunct all business class airline Silverjet “Every day, Silverjet, the world’s most sivilised airline brings a select few people together”.

However, it’s not clear at whose expense the joke was: BA’s or the client that actually paid for the advert.

“Clouds”

This was BBH’s first TV advertising campaign for BA in 2006. 

You could say it was a very cautious, steady start. The advert featuring a cover of John Denver’s “Leaving On A Jet Plane” highlighting a commitment to service at affordable prices.  Some of the items featured such as complimentary short-haul catering are no longer offered.

“Upgrade to BA”

“Upgrade to British Airways” was the strapline BBH pitched to BA.

This film features a very familiar device in airline advertising. BA cabin crew hand out amenities to members of the general public in the attractive surroundings of Circular Quay, Sydney, with the intention of highlighting the thoughtful and friendly nature of its service.

“Attractive Prices”

These are very elegant executions of a simple message about the pricing of short-haul fares on ba.com.

“The Good Life”

This was an advert that was never shown, at least in the UK.

Featuring fish swimming through Terminal 5 to the sound of “The Good Life” by Julie London, it was intended to showcase the opening of Terminal 5 in 2008.

Before launch, BA promised its passengers Terminal 5 would be “So Calm. You’ll just flow through”. Although Terminal 5 did eventually deliver a significant operational improvement for BA, it was pulled due to its chaotic opening weeks.

Continue reading “A History Of British Airways Advertising – Part 8”

A History Of British Airways Advertising – Part 7

A look at British Airways’ advertising over the past 50 years as BA recovers from the events of 11 September 2001.

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British Airways Club World Sleeper Service
British Airways Club World Sleeper Service

Welcome to the seventh part of our look at some of the most influential and noteworthy BA advertising of the past 50 years.

We’re in the first decade of the 21st century as BA starts to recover from the events of 11 September 2001 and spends considerable time promoting its Club World long-haul business class.

“It’s Better To Be There”

When there is a degree of a return to normality following the outbreak of Coronavirus, a challenge for airlines is deciding the right time to encourage passengers to fly again, and adopting the right tone of voice.

One such example was a TV advertising campaign “It’s Better To Be There” from early 2002. This was BA’s first major advertising campaign after the events of 11 September 2001.

An American businessman is featured receiving pitches from British businesses. One despatches its proposal by post and conducts the pitch by telephone. As the American businessman promises to give it due consideration a rival team walks into to conduct their pitch face to face.

“There Are Other Ways, Then There’s British Airways”

Ever since low cost airlines gained traction in the UK, and significantly brought down the cost of short-haul travel, BA has been in a battle to highlight its relative benefits.

Here is one such campaign from 2003. Of course, the differences today are not so great. Low cost airlines have adopted many features of legacy airlines such as allocated seating. BA now charges for seat selection, and checked baggage on some fares. Complimentary catering was also withdrawn amongst great controversy three years ago.

The Orchestra

This is what is called, in advertising industry parlance, a “masterbrand” advert. It does not promote one single service.

Former BA CEO Lord Marshall once likened arranging all the different elements BA’s service to that of an orchestra.

Here a male passenger travels from New York to meet his family on a beach, accompanied by an orchestra every step of the way.

There was absolutely no expense spared. The advert was filmed in New York, London and Mozambique. Most scenes barely last a second and there are countless aerial shots.

Continue reading “A History Of British Airways Advertising – Part 7”