As relieved as everyone is to have seen the back of 2020, hopes that life and, by extension, air travel will fully return to normal in 2021 remain remote.
The imposition of travel restrictions on passengers from the UK immediately before Christmas 2020 indicated how rapidly circumstances can change and how unpredictable the COVID-19 pandemic is.
Normally at this time of year we can present a laundry list of firm airline route and fleet plans for the next 12 months. Whilst many airlines do have plans for the summer season, no one knows to what extent these will be realised.
What is certain that COVID-19 has put airlines under severe financial pressure which will affect investment plans for years to come.
Yesterday, 31 December 2020, IAG confirmed that British Airways is to secure a state guaranteed £2 billion loan facility. Virgin Atlantic has not yet filed its annual accounts for the year to 31 December 2019.
Here are at least some things to watch out for in 2021.
Airport Slot Wars
For most of the past 12 months, airlines have benefited from a relaxation of “use it or lose it” slot rules.
This has benefited incumbent airlines, and particularly those that want to keep slots across Gatwick and Heathrow. And they’d like to keep it this way.
Airports and challenger airlines such as Wizz Air have other ideas. The Worldwide Airport Slot Board has proposed a compromise whereby airlines have to temporarily hand back slots for the summer season by February so new entrants can use them. Otherwise they must use their slots for at least 50% of the season, subject to exemptions for short notice cancellations due to travel restrictions.
Many things are a given. A number of existing airlines will fail or fold into others. New start-up airlines will come and go.
Climate change will dominate public discourse over the next decade, with airlines acutely conscious of the need to reduce CO2 emissions.
Both IAG and Qantas have committed to net zero carbon emissions by 2050. Qantas has committed to cap its net carbon emissions at 2020 levels. easyJet is also offsetting carbon emissions from all flights.
Here are some of our predictions for themes and trends over the next decade:
No Third Runway At Heathrow
Even if Heathrow manages to overcome the environmental opposition and legal challenges to a third runway, the chances of it being operational by 2030 are slim at best.
Even based on current estimates if a third runway is constructed by 2026 it won’t be until 2050 that all the supporting infrastructure is completed.
At least Crossrail should be running to Heathrow by 2030.
Non-Stop Flights to Brisbane, Melbourne & Sydney
Is Qantas’ talk of non-stop flights from London to the East Coast of Australia merely hype?
It’s certainly true that Qantas have managed to generate a huge amount of PR before even ordering any aircraft.
That said, Qantas would not be briefing institutional investors, who are very unforgiving about not managing expectations, if it wasn’t intent on launching these flights.
So, bar some major unforeseen problem, look forward to non-stop flights from London Heathrow to Brisbane, Melbourne, Sydney from 2023 and beyond.
More New Long-Haul Routes
A number of airlines have placed orders for the Airbus A321 XLR aircraft.
These include Aer Lingus (6 aircraft), American Airlines (50 aircraft), Iberia (8 aircraft), JetBlue (13 aircraft), Qantas Group (36 aircraft) and United (50 aircraft).
The Airbus A321 XLR is due to enter service from 2023. With a range of 4,700 nautical miles, the aircraft is seen as a enabling many new transatlantic routes between Europe and the US.
Electric Powered Aircraft & Sustainable Aviation Fuels
If not in the air by 2030, we should at least be close to hybrid electric aircraft for short-haul flights.
Eviation is developing a battery powered commuter aircraft and US airline Cape Air has purchase options for this aircraft.
Airlines around the world continue to invest in Sustainable Aviation Fuels. United already procures fuel from World Energy and has invested in Fulcrum BioEnergy. IAG is partnering with Velocys which aims to introduce waste-to-jet-fuel from 2024 from a new plant in South Humberside.
In January 2010, BA was still reeling from the impact of the 2008 financial crash. The airline had just inked the terms of its merger with Iberia after calling off talks with Qantas. Norwegian was a largely short-haul airline based in the Nordics. Business travellers used devices known as Blackberrys to check work e-mails. Instagram did not exist.
The decade where everything changed is coming to an end. Here are some of the main themes and trends in air travel of the past ten years.
The Future Of Long-Haul Travel Has Two Engines
In January 2010, Air New Zealand, British Airways, Cathay Pacific, El Al, Korean Air, Malaysia Airlines, Qantas, Thai Airways, and Virgin Atlantic all operated the Boeing 747 at London Heathrow.
Today just one airline does, BA.
And on the subject of quad-engined aircraft…
The Hub-Busting Aircraft Won
Before the launch of the Airbus A380 and Boeing 787 Dreamliner, there were two competing narratives offered by Airbus and Boeing.
The future of air travel was passengers flying via major hubs, hence the demand for larger aircraft. Or it was smaller aircraft flying over hubs by opening up new routes that had not previously been financially viable.
There’s no doubt who won the argument. Whilst the Airbus A380 is much loved by passengers, it has only really worked for Emirates and, to an extent, BA. Airbus is to suspend production of the A380 in 2021. A number of airlines including Air France and Lufthansa are retiring the aircraft early with no evident second hand market. Others have cut A380 services from London.
Airlines clearly like smaller efficient aircraft as it enables them to be the exclusive operator of new routes from their hubs. Many more routes will follow in the next decade with the Airbus A321 XLR aircraft.
And on the subject of efficiency…
One Stop Long-Haul Flights Are On Their Way Out
10 years ago, Qantas operated up to five daily services between Europe and Australia via Asia.
BA also operated two daily services to Sydney via Bangkok and Singapore, and Virgin Atlantic served Sydney via Hong Kong.
Today, this has been reduced to one daily flight by both BA and Qantas to Sydney via Singapore.
Air New Zealand will also suspend London Heathrow to Auckland via Los Angeles in 2020 having already suspended its eastbound service to Auckland via Hong Kong.
With so many one-stop options between Europe and Australia/New Zealand on airlines with hubs in Asia and the Middle East, one-stop flights are simply not economic for European and Australian/New Zealand airlines. Qantas’ flight to Sydney via Singapore will in all likelihood be replaced by a non-stop flight from 2023.
Low Cost Long-Haul Is Here To Stay
Before Norwegian launched low cost long-haul flights at Gatwick, some senior industry figures had doubts it would work.
The Boeing 787 was the wrong aircraft and there was little point in charging customers for hot meals on long-haul flights.
Whilst the jury is still out on whether Norwegian can achieve long term profitability, IAG has launched its own low cost long-haul airline LEVEL and all major transatlantic airlines now offer “basic” unbundled long-haul economy fares.
And on the subject of basic economy…
The Decade Of Personalisation
Once upon a time, most airlines had economy and business class cabins and a Saturday night stay rule to distinguish between business and leisure passengers.
Now economy has been split into three cabins with the addition of basic economy and economy comfort at the front. Most major airlines have finally learned to embrace Premium Economy after years of resistance for fear of business class passengers trading down.
Thanks to new distribution channels and the easy ability to up-sell ancillary services via their websites and apps, airlines now target groups such as (in their words) “Frugal Fun”, “Efficiency Seeker”, “Global Getaway”, “Care Seeking Family” and “Leisure Indulgence”.
Airlines Adopted “Densification”
Put simply, this is squeezing in more seats.
Whether it’s ten abreast seating on the Boeing 777 or squeezing in as many seats as possible on Airbus short-haul aircraft with the aid of thinner seats, “densification” became a firm part of many airlines’ lexicon.
The Basic Rules Remain The Same (Part 1)
Sir Richard Branson and Willie Walsh may not agree on many things, but there is one thing they do agree on.
Both would say that new airlines need to pursue steady, cautious growth as new routes take years to establish and excess unprofitable capacity is destructive of value.
Norwegian did not do this. Nor did failed airlines such as Primera Air and WOW air. After a period of seemingly relentless expansion, Norwegian is now desperately backtracking having suspended many long-haul routes and forming a joint-venture to relieve itself of future aircraft financing obligations.
Here’s the second part of our series detailing some of the airlines and brands that disappeared from 2010 to 2019. You can read the first part here.
Malév Hungarian Airlines
Malev Hunagarian Airlines suspended flights in March 2012 after some 66 years of operations.
Controlled by the Hungarian state, the airline was forced to stop flying after airports in Dublin and Tel Aviv refused to allow its aircraft to take-off because of unpaid debts. The European Commission had also ruled that it had to repay 100bn Hungarian Forint in state aid.
Malev was, by some margin, the largest airline in Budapest and the void was quickly filled by Ryanair and Wizz Air.
Mexicana suspended operations in August 2010 under the weight of debt and citing depressed visitor numbers to Mexico.
A plan to restart the airline’s operations with new investors and a slimmed down fleet and workforce never came to fruition.
The collapse of Monarch was one of the most high profile airline failures of 2017.
The airline’s owner, Greybull Capital, cited falling yields and volatility in markets such as Egypt and Turkey, as the reasons for its collapse. Rivals, such as easyJet and IAG, also failed to express an interest in the airline. Its collapse was, until the failure of Thomas Cook two years later, the UK’s biggest peacetime repatriation as the CAA had to bring 110,000 holidaymakers home.
As a decade draws to a close, one over-riding theme has been consolidation in both Europe and the US.
Whilst there are still many independent European carriers such as Finnair, SAS and TAP Air Portugal, air travel in Europe is inexorably consolidating into either easyJet and Ryanair or Air France-KLM, IAG and Lufthansa.
A very large number of airlines in Europe have failed. According to figures from IAG, since 2000 154 short-haul airlines were launched in Europe and 107 failed.
Other airlines including CityJet also withdrew from scheduled passenger services. There were also some such as Odyssey Airlines which, to date, have not got off the ground.
Here are some of the airlines and brands around the world we lost from 2010 onwards. The list being so long, it has been published in two parts. Here is the second part.
Founded in 1946, French airline Aigle Azur suspended operations in September 2019 after failing to secure a buyer.
Its operations were based at Paris Orly Airport and it flew principally to destinations in Algeria as well as other destinations in Africa, Europe and the Middle East.
Founded in 1979, Air Berlin was Germany’s second largest airline.
Having previously acquired airlines such as dba (formerly Deutsche BA) and LTU, it had all the structural and operational complexities to match.
In its later years, it was a member of the Oneworld alliance, but with relatively limited relations with its alliance partners. It never joined the transatlantic joint business with American Airlines and BA. Etihad was also a minority shareholder as it sought to use Air Berlin as a conduit to draw long-haul traffic from Germany to its hub in Abu Dhabi.
A near permanent state of restructuring could not turn the airline’s fortunes around and the delays to Berlin Brandenburg Airport meant it never fulfilled its ambition to become a major hub airline.
After suspending all long-haul operations, the final flight took place on Friday 27 October 2017 under flight AB6210 from Munich to Berlin Tegel. Most of its short-haul operations have been acquired by either easyJet or Lufthansa. Its sister airline Niki was acquired by Laudamotion, which is now part of Ryanair.
bmi British Midland
bmi British Midland (“bmi”) and BA were once fierce rivals at Heathrow.
Although bmi’s history is almost as long as BA’s it was in the 1980s that BA and bmi started to compete head to head on domestic routes at Heathrow, initially to Glasgow to Edinburgh. This was at a time when route authorities were granted by the Government.
Whilst bmi was by some distance the second airline at Heathrow and it had nowhere near the international presence of BA, it inspired tremendous loyalty from its frequent flyers. It had far more stable industrial relations than BA at Heathrow. Many domestic passengers also complained that BA would always cancel domestic flights first in the event of operational disruption.
For many years, bmi was deeply frustrated that it could not fulfil its ambition to launch transatlantic flights from Heathrow which, due to the Bermuda II treaty, BA and Virgin Atlantic were the only UK airlines that could do so. It had even acquired a fleet of long-haul Airbus A330 aircraft which were subsequently used to operate transtlantic routes from Manchester. As the UK member of Star Alliance it also had the financially and operationally thankless task of providing short-haul feed to Star Alliance airlines at Heathrow.
Facing increased competition from low cost airlines, bmi sought to reinvent as a medium / long-haul airline. Whilst the difficult launch of Mumbai proved to be short-lived, it did launch services to Jeddah and Riyadh in Saudi Arabia, Cairo and Moscow. bmi also acquired former BA franchise partner British Mediterranean in 2007. Whilst this bolstered bmi’s portfolio of medium-haul routes, many of these were to areas very exposed to geopolitical events.
How bmi ultimately came to be acquired by BA dates back to 1999 when bmi’s controlling shareholder Sir Michael Bishop entered into a “put and call” agreement with Lufthansa.
In 1999, Lufthansa acquired a 20% share of bmi for £91.4m, which valued the airline at £457m. Sir Michael also made a deal whereby he could exercise an option to sell his controlling stake in bmi of 50% plus one share to Lufthansa for £298m.
In 2008, Sir Michael exercised his option. Lufthansa baulked at the price and reached an out of court settlement with Sir Michael. Lufthansa paid Sir Michael £175m to give up his option right, and £48m to acquire his share, valuing the airline at just £98m.
Although this was seen by commentators as a major opportunity for the dominant Star Alliance airline to gain a foothold at Heathrow, it did not turn out that way.
In 2011, faced with continued heavy losses, Lufthansa decided to entertain offers to buy bmi. In spite of Virgin Atlantic making a lot of noise, IAG emerged as the only credible bidder. IAG took control of bmi in 2012. BA wasted little time in suspending former bmi routes and very few now remain such as Amman, Beirut, Belfast, and Dublin.
As part of the deal, BA was required to make slots available to competitors on overlapping routes such as Aberdeen and Glasgow. These were initially taken up by Virgin Atlantic Little Red, and are now used by Flybe, which will be rebranded as Virgin Connect in 2020.
IAG also shut down bmi’s low cost off-shoot bmi baby. It’s regional operation bmi regional was sold to private investors. However, this collapsed in 2019.
Cobalt Air had a relatively short life.
It began operations in 2016 and flew from London Gatwick, Heathrow and Stansted to Larnaca and from London Gatwick to Athens. It collapsed in October 2018.
After running through the major developments for London’s two main long-haul airlines British Airways and Virgin Atlantic, here’s what you can expect from other airlines and airports around the world in 2020.
Air New Zealand
Air New Zealand will, sadly, leave London in 2020.
Its last remaining route from London Heathrow to Auckland, via Los Angeles, will be suspended from Sunday 25 October 2020. Air New Zealand will continue to serve London indirectly via codeshare partners.
Alliances & Joint-Ventures
The three major airline alliances continue to prove to be fragile constructs with limited allegiances.
LATAM will leave the Oneworld alliance in 2020 following Delta’s acquisition of a 20% stake in the airline, and it has no plans to join SkyTeam. Air Europa should also leave SkyTeam should IAG’s purchase of the airline go ahead. Again, there are no plans for the airline to join Oneworld.
On a more positive note, Royal Air Maroc will join Oneworld this year. Interestingly, following the launch of a new tier of membership known as “Oneworld Connect” with Fiji Airways as the inaugural member, no further airlines have been announced as members.
Aer Lingus should also finally receive regulatory approval to join the AA/BA transatlantic joint-business this year.
Berlin Brandenburg Airport
After a delay of no less than 9 years, Berlin Brandenburg airport will finally open on Saturday 31 October 2020.
Neither, BA, easyJet nor Lufthansa have yet to announce when they will move to the new airport. However, the latest update from Berlin Brandenburg says that Berlin Tegel will close for scheduled passenger operations on Sunday 8 November 2020.
As history has shown, new airport operations can be very difficult. Given the extensive delays and many design flaws identified at Berlin Brandenburg, there will be considerable scrutiny of its operational performance in the opening weeks.
One to file under “should have been announced in 2019.”
easyJet was due to relaunch its frequent flyer programmes in 2019. This was one of two major initiatives, alongside the launch of easyJet Holidays which went ahead as planned. However, easyJet has gone very quiet on the relaunch of its loyalty programmes.
Finnair continues its strategy of exploiting its geographic location to attract connecting traffic between Europe and Asia.
Its twice weekly service to Sapporo which launched on 15 December 2019 has now been extended to a year round service. Finnair will also launch a new summer seasonal service to Busan, South Korea from Monday 30 March 2020 and a new year-round daily service to Tokyo Haneda from Sunday 29 March 2020, in addition to its existing service to Tokyo Narita.
Flybe will be officially rebranded as Virgin Connect in Spring 2020.
The airline has already substantially cut its UK regional network with a large number of routes suspended as the airline prepares to reduce its fleet. However, due to the time it will take to repaint aircraft, it will be some time before the Flybe name disappears for good.
Heathrow’s Third Runway
The Civil Aviation Authority is currently consulting on Heathrow Airport’s costings for a third runway, specifically the expenditure it will incur in advance of seeking final approval by means of a Development Consent Order to construct the runway.
The consultation closes on Saturday 28 February 2020 and the CAA’s decision should be known in the Spring. The outcome of this could have an impact on when the third runway will enter into operation. Initial estimates of 2026 now seem “optimistic”.
In 2020, we should learn of the London airport from which JetBlue will launch services to Boston and New York JFK.
Of course, by giving its competitors so much advance notice of its plans to launch transatlantic services from London, some have already made pre-emptive moves with Delta and Virgin Atlantic launching Boston and New York JFK respectively at Gatwick.
A very Happy New Year to all our readers around the world.
We got new routes!
In 2019, we will see many new routes, and former routes from London reinstated.
By this time next year we may also know whether in three years’ time we will be able to fly to Sydney non-stop. Here’s a quick run through of new routes launching in 2019.
London Gatwick Long-Haul
Norwegian continues to reshape its London Gatwick network, launching Rio de Janeiro four times weekly from Sunday 31 March.
It will also swap routes from Gatwick to Fort Lauderdale and Oakland to Miami and San Francisco International respectively from 31 March.
Austin and Seattle will also resume following their winter seasonal suspension on Friday 1 March and 31 March respectively.
In theory, Norwegian is supposed to take delivery of the Airbus A321 Long Range this year and may announce more transatlantic routes but this is very much dependent on its overall financial health.
London Heathrow Long-Haul
Virgin Atlantic will transfer Las Vegas from Gatwick to Heathrow from 31 March.
Air China will transfer Chengdu from Gatwick to Heathrow from 31 March.
BA will return to Osaka after a near 20 year absence, four times weekly from 31 March.
American Airlines will launch a daily service to Phoenix from 31 March.
BA will return to Pittsburgh, four times weekly, from Tuesday 2 April.
BA will fly to Charleston twice a week from Thursday 4 April until Thursday 24 October. It’s relatively unusual for BA to launch a low frequency seasonal long-haul route, and if a success, this could presage more route announcements.
Two certain events are likely to dominate in 2019.
The first is BA’s centenary celebrations.
The airline will officially celebrate its centenary on Sunday 25 August 2019. This will mark 100 years since the first scheduled international passenger service between London and Paris.
It can be said with confidence there will be a lot of PR activity in advance of this. The airline has already said there will be “100 acts of kindness” throughout the year as part of its “BA Magic” series. You can also expect a lot of in-flight service improvements in the first half of the year.
The second is that both BA and Virgin Atlantic will take delivery of their first Airbus A350-1000 aircraft.
Both airlines will be introducing entirely new Club World and Upper Class cabins respectively.
This is the first time both airlines will undertake a full redesign of their cabins since they each introduced fully flat beds. BA will be abandoning its patented “yin-yang” layout. Virgin is also expected to replace its current herringbone design.
It’s hard to envisage both airlines not going for something other than a forward facing 1-2-1 design. Though both will want to differentiate themselves in the market. Whoever comes up with the leading design, will Virgin let BA have the last word? Probably, not.
As events this year have shown, there is no shortage of willing entrants on the UK transatlantic market. JetBlue, subject to obtaining slots, may announce new transatlantic routes from Boston and New York to London.
Like JetBlue, WestJet is respected local brand. However, it’s entry into the transatlantic market a couple of years ago got off to a very difficult start, primarily due to the reliability of its Boeing 767s. Its competitiveness should improve significantly next year when it introduces the Boeing 787 with its first international business class cabin at Gatwick.
Qantas is also expected confirm next year whether it will launch non-stop flights from London to Sydney.
It is currently in discussions with Airbus and Boeing about placing an order for suitable aircraft. The launch of non-stop flights to Perth this year generated huge amounts of PR for the airline and has, at least as far as Qantas is prepared to say, has been a commercial success.
In terms of loyalty programmes, easyJet will be making another move onto BA territory by launching its first ever frequent flyer currency. Virgin will also relaunching its frequent flyer programme as it, subject to regulatory approval, launches a new combined transatlantic joint-venture with Air France-KLM.
The two big unknowns are Flybe and Norwegian.
Virgin Atlantic confirmed shortly before Christmas that it is still in discussions with Flybe. This does suggest that it is serious in its intent.
In theory, next year Norwegian is supposed delivery of yet more Boeing 737 MAX8 and Boeing 787 aircraft, and its first Airbus A321 Neo Long Range aircraft. However, it’s clear from an update shortly before Christmas that preserving cash is currently a priority. Norwegian will be selling aircraft – both existing and those yet to be delivered. Whatever happens next, the era of rapacious growth is simply over.
Things have gone very quiet regarding IAG and Norwegian. That is not to say there isn’t activity behind the scenes – it’s when there’s an impasse that there are leaks. IAG is not an organisation to shy away from hard work and would relish the “transformational” aspects of any acquisition, specifically in the Nordic region and at Gatwick. However, given the number of overlapping city pairs between IAG airlines and Norwegian, it’s hard not to see slot significant divestures being demanded by competition regulators.
As 2018 draws to a close, it’s time for a customary look back at the year gone by.
It was a year of many airline failures. Some came and went in the UK market very quickly. Others will enter 2019 facing continued uncertainty.
Consolidation In Europe Has Some Way To Go
Over the past 15 years or so, legacy airlines in Europe have consolidated into one of Air France-KLM, International Airlines Group and Lufthansa.
easyJet and Ryanair have become the dominant low cost airlines.
After the failure of Air Berlin and Monarch in 2017, CityJet, once dominant at London City, suspended scheduled flying and now provides wet lease services only. Cobalt Air, Primera Air, and VLM Airlines failed.
Flybe is searching for a new owner. Finnair repeatedly indicates a desire to play its part in consolidation. There is some way to go yet.
Reykjavik Is Not Dubai
Iceland’s WOW air once had an ambition.
If Dubai could capture great swathes of connecting traffic between Europe and Africa and Asia, then why could Reykjavik not do the same across the North Atlantic?
The answer of course is what Emirates did at Dubai to great effect was provide passengers between Europe and Asia and Australia with scores of new one-stop connections that previously required two changes. And all in better comfort.
There are of course ample direct flights between most major European and North American gateways and many connection opportunities at better connected airports.
This did not deter WOW air which embarked on an aggressive expansion plan, launching many new US cities from Reykjavik. This now lays in tatters. It is rapidly shedding itself of aircraft and routes in the hope of securing a new investor. Continue reading “2018 – A Year In Air Travel”
Here are the new short-haul and long-haul flights launching from London City, Gatwick, Heathrow and Stansted airports in 2018, which includes the launch of the world’s longest flight between London and Perth.
A very Happy New Year to all our readers around the world.
There’s a lot to look forward to in 2018, so let’s start by taking a look at what new routes we can expect this year. No doubt many more announcements will follow in the coming months.
London Heathrow – Perth Non-Stop
This big headline is of course the launch of non-stop flights between London Heathrow and Perth from Sunday 25 March 2018.
With a flight time of nearly 17 hours, this route will test passengers’ appetite for “Ultra Long-Haul” travel. It may also presage, subject to aircraft technology, more direct flights between London and Australia in the 2020s.
Qantas has made much of the fact that it is looking to adapt in-flight service to the length of the flight so it will be interesting to see what emerges.
Ultimately, the success of the route will hinge on its technical reliability and financial profitability. The latter depends on sufficient year round demand from business class passengers who will be prepared to pay a premium for a non-stop flight.
This route will replace Qantas’ existing London Heathrow – Dubai – Melbourne flight. At the same time, Qantas will also replace London Heathrow – Dubai – Sydney with London Heathrow – Singapore – Sydney. Continue reading “London’s new routes for 2018”