Category: Monday Briefing

London Air Travel » Monday Briefing

Welcome to our Monday Briefing for the week beginning 14 October 2019.

Aviation Prepares For Climate Change Scrutiny

Events were dominated last week by the ongoing “Extinction Rebellion” protests in London, which involved a day of disruption at London City airport.

Whilst the protestors generated a lot of press coverage, they have not yet won over the “hearts and minds” of the public. Many representatives did not perform well when some of their apocalyptic claims were put to question in TV interviews.

That said, the airline industry is now preparing itself for much greater scrutiny on its impact on climate change.

Last week BA’s parent company IAG announced it plans to achieve net zero carbon emissions by 2050. BA will also pay to offset the carbon emissions from UK domestic flights from next year. Though, note BA has not yet changed its plans to keep the Boeing 747 in service until 2024.

Whilst the concept of “flight shaming” has entered contemporary lexicon and some in the commentariat are calling for higher taxation on frequent flyers (Financial Times) there is no sign yet of a wholesale shift in public opinion against flying.

That said, public sentiment can change. Witness the near wholesale change in attitude towards single use plastics following the BBC series “Blue Planet II”. A single image with the right messenger can have a powerful impact. This is an industry where even a small percentage fall in demand can have huge financial consequences.

Qantas “Project Sunrise” Test Flights

Qantas will carry out the first of its ultra long range “Project Sunrise” test fights this week. A Boeing 787-9 aircraft will fly from New York JFK to Sydney on Friday.

A test flight with another Boeing 787-9 aircraft will operate non-stop from London to Sydney later this year. Qantas has confirmed that Airbus and Boeing have submitted final offers to supply aircraft capable of flying non-stop from London to the East Coast of Australia.

A decision is expected by the end of this year. As well as economics, a final decision is dependent on regulatory approval and reaching agreement with Qantas’ trade unions. It has to be said if Qantas does not go through with the project, it will be a considerable failure in expectations management.

Also of note this week:

Air New Zealand appoints Greg Foran, currently President & Chief Executive Officer of Walmart US as its CEO. (Air New Zealand)

Guernsey based Aurigny is expected to report losses of £9.6m in 2020. (BBC News)

Late post publication updates:

[Reserved for updates throughout the day]

The European Commission has approved a bridging loan from the German Government to Condor. (Condor)

Our Monday Briefing is published every Monday at 06:00 BST. If you have any comments, suggestions or tips then please drop us a line at mail [@] londonairtravel.com

London Air Travel » Monday Briefing

Welcome to our Monday Briefing for the week beginning 7 October 2019.

100 Years Of KLM

Today marks 100 years since the formation of KLM. As KLM is keen to point out it is the oldest airline to operate under one name.

The first flight wasn’t until May 1920 when, in conjunction with Air Travel & Transport Ltd (a predecessor airline to BA), it flew from Croydon to Amsterdam.

In its 100 year history KLM has played a significant role in UK aviation, thanks to the close proximity of its Amsterdam hub and coverage of UK regional airports. It has also been a pioneer with its transatlantic joint-venture with Northwest Airlines and the first (if not always harmonious) major pan-European merger with Air France.

History could have taken a very different course had BA merged with KLM. Talks in 1992 and 2000 both fell through. IAG CEO Willie Walsh has never hidden the fact that this is a deal that should have happened and wouldn’t have fallen through on his watch.

In the future we can expect much greater co-operation between KLM and Virgin Atlantic with a combined transatlantic joint-venture with Delta and a frequent flyer partnership.

KLM is marking its centenary with a TV advertising campaign in the UK.

You can also explore more of KLM’s history on a dedicated microsite.

Continue reading “Monday Briefing – 7 October 2019”

London Air Travel » Monday Briefing

Welcome to our Monday Briefing for the week beginning 30 September 2019.

Thomas Cook

The Civil Aviation Authority’s “Operation Matterhorn” to bring Thomas Cook customers back to the UK is expected to continue until this Sunday, 6 October 2019.

Yesterday, 70 flights were scheduled to operate to bring 15,000 people back to the UK, taking the total number of passengers returned to nearly 110,000.

Whilst the Civil Aviation Authority’s exercise is expected to conclude this week, the recriminations over the company’s collapse will continue for considerably longer.

Thomas Cook’s CEO Peter Fankhauser gave an interview to the Mail On Sunday yesterday effectively pointing the finger of blame at the level of debit he inherited from his predecessors and the cost of serving it.

The closure of Thomas Cook is expected to have a significant impact in Spain with the company having been responsible for carrying 3.6 million passengers to the country and a substantial minority of visitors to the Balearic and Canary Islands. (El Pais In English)

In Germany, Thomas Cook subsidiary Condor has received a bridging loan from the German Government to enable it to continue to trade. (Condor)

Following the precedent set in a court case following the collapse of Monarch the liquidators will be entitled to sell off Thomas Cook’s Gatwick and Manchester slots. IAG, Virgin Atlantic and Wizz Air have expressed an interest in Thomas Cook’s slots at Gatwick.

Thomas Cook’s auditors will also face scrutiny. The Financial Reporting Council, which is responsible for regulating the audit profession, has said: “In light of recent developments at Thomas Cook we are considering whether there is any case for investigation and enforcement action as a matter of urgency and in cooperation with the Insolvency Service.”

Finally, the Business Archives Council is seeking to preserve Thomas Cook’s historical archives. (Organizational History Network)

Delta Swoops LATAM from Oneworld

Airline alliances are fragile constructs. They are loose gatherings of airlines who are often intense rivals and are also distracted by local priorities.

Delta stunned Oneworld last week by prizing LATAM away from the alliance. Whilst American Airlines, the Oneworld member with the most to lose, and Oneworld, initially put a brave face on the news, there are already signs that LATAM’s departure may become acrimonious.

Whilst LATAM is contractually bound to meet all of the obligations of its membership (such as reciprocal recognition of frequent flyers) until it leaves the alliance, it appears that codeshares between American Airlines and LATAM have already been withdrawn from sale.

It’s not immediately clear which airline was responsible for instigating this move, but American Airlines had to issue a statement on Saturday confirm that those passengers with existing bookings should have their itineraries honoured.

Delta’s move does also have an impact on IAG with BA and Iberia both having codeshares with LATAM. IAG is not an organisation to leave others to control events and its plans will no doubt be known in due course.

Also of note this week:

Continue reading “Monday Briefing – 30 September 2019”

London Air Travel » Monday Briefing

Welcome to our Monday Briefing for the week beginning 23 September 2019.

Thomas Cook

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.

Continue reading “Monday Briefing – 23 September 2019”

London Air Travel » Monday Briefing

Welcome to our Monday Briefing for the week beginning 16 September 2019.

Norwegian & Thomas Cook

This week could be a very significant one for both Norwegian and Thomas Cook.

Today is the deadline for Norwegian’s bondholders to agree to an extension for the redemption of two outstanding bonds valued at $380 million from 11 December 2019 and 7 August 2020 to November 2021 and February 2022 respectively. This would be backed by a security package that includes Norwegian’s slots at London Gatwick.

Thomas Cook is also in final negotiations with its shareholder Fosun, lenders and bondholders to complete a £900m rescue deal. This is expected to give Fosun and Thomas Cook’s lenders control of the business, with remaining shareholders seeing their investments virtually wiped out. The Financial Times has reported that a planned meeting of bondholders this Wednesday may be postponed.

Update: Norwegian’s bondholders have agreed to the extension.

Cathay Pacific August 2019 Traffic

Cathay Pacific has revealed the impact of disruption in Hong Kong on its traffic performance.

The number of passengers carried fell 11.3% year on year. Its load factor was also down 7.2 percentage points to 79.9%. Inbound traffic to Hong Kong fell 38% and outbound traffic from Hong Kong fell 12%. The falls in traffic were particularly pronounced in premium cabins and mainland China and North East Asia markets.

Europe was the best performing market and traffic has held up relatively well. Cathay has indicated that as there is no sign of an imminent improvement it will be making short-term capacity adjustments.

PriestmanGoode at The Design Museum

London Design Week is currently underway. As part of this the acclaimed design agency PriestmanGoode has an exhibition “Get Onboard: Reduce.Reuse.Rethink” at The Design Museum.

The exhibition looks at the typical amount of waste generated by a single passenger on a long-haul economy flight. This is estimated to be 1.43kg per passenger, of which 500g is single use plastic.

This is primarily from the food and beverage service. Plastic serves a useful purpose for airlines. It is cheap, durable and lightweight. The exhibition looks at what alternative sustainable materials could be used, such as bamboo and wheat bran.

A number of airlines have committed to reduce the use of single use plastics. Earlier year, Qantas operated a “zero waste” test flight in Australia from Sydney to Adelaide.

To implement this in practice airlines require supply chains that can meet the scale of their operations around the globe, whilst also meeting strict hygiene standards on the disposal of organic waste. Of course, there is a lot – as touched on by the exhibition – that passengers can do to reduce single use plastic. And that includes all passengers, wherever they are seated on the aircraft, being prepared to rethink what they really need from a long-haul flight.

“Get Onboard: Reduce.Reuse.Rethink” is on display at The Design Museum until Sunday 9 February 2020.

On a related note, BBC Radio 4’s “In Business” this coming Thursday looks at changing attitudes towards the environmental impact of aviation.

Continue reading “Monday Briefing – 16 September 2019”

London Air Travel » Monday Briefing

British Airways Pilot Strike

BA is no stranger to signifiant operational disruption, whether it is fog, snow, IT failures, terrorist threats or, indeed, industrial action.

However, it is hard to recall a time when its entire flying programme from both Gatwick and Heathrow has been cancelled for 48 hours, as it has today.

At the time of publication there is no sign of an end to the current impasse between BA and BALPA as no negotiations are underway between the two.

The strike has of course generated significant media coverage with claim and counter-claim and whilst in IAG’s view this is all “noise” if the dispute becomes protracted there will be political pressure on BA and IAG to bring it to an end. Ultimately, both sides need to reach an agreement.

Unless a settlement is reached by Friday, BA is likely to start cancelling flights for the second phase of industrial action on Friday 27 September 2019.

BALPA is required to give 14 days’ notice of any further strike action and to give an indication of how it might ratchet up the pressure, last week BALPA announced a further 7 days of strike action over a period of 12 days at Ryanair.

BA Updates iPad App

In other BA news, BA has updated its iPad app.

This was previously a version of its smartphone app for the iPad. It has now been entirely redesigned and is now geared solely towards buying flights.

“Heathrow: Britain’s Busiest Airport” Returns

Channel 5’s behind the scenes series on BA “British Airways 24/7 Access All Areas” debuted last week.

These shows do depend on access, and the production company Title Role productions certainly secured that. However, some of the production devices shows like these rely on, such as jeopardy, were absent. It continues this Thursday with a look at BA’s new First Class service.

Also returning this week is “Heathrow: Britain’s Busiest Airport” on ITV this coming Wednesday at 20:00.

Continue reading “Monday Briefing – 9 September 2019”

London Air Travel » Monday Briefing

Welcome to our Monday Briefing on its return from a summer break. It has of course been an eventful summer, particularly for BA and Cathay Pacific.

BA Pilot Strike

BA’s first pilot strike in decades looks set to go ahead next Monday 9 September 2019.

It could still be called off at any time up to 23:59 BST on Sunday, but there are no signs of any talks taking place between BA and BALPA. With BA having announced cancellations for the first two days of industrial action immediately following its announcement, the substantial financial impact has already been felt by BA.

BA has yet to announce cancellations for the 2nd strike on Friday 27 September 2019. BALPA has not yet announced any further strikes and must give 14 days’ notice before doing so.

Those who have seen industrial disputes before will know that a settlement can ultimately hinge on issues that were not originally the subject of the dispute. BA is likely to withdraw staff travel privileges from pilots taking part in the strike, and its reinstatement will probably be a condition of any settlement.

Inaugural BA A350-1000 Long-Haul Flight

BA’s Airbus A350-1000 aircraft makes will operate its first long-haul passenger flight from London Heathrow to Dubai today.

Flight BA107 from Heathrow to Dubai will be operated with the Airbus A350-1000 from today (with the return BA106 from tomorrow), save for Saturday 7 and Sunday 8 September.

Route Changes & Heathrow Slot Trades

A number of Heathrow slot trades for the winter season have been announced in the past week, some of which dovetail with a number of route changes.

Etihad is leasing one of the three daily Heathrow slot pairs it took back from Jet Airways to BA.

Lufthansa is leasing six weekly slot pairs to United Airlines and one weekly slot pair to Austrian Airlines. These slots will enable United to make its summer seasonal route to Denver year-round. These were previously used by Eurowings which is suspending its twice daily service from London Heathrow to Berlin Tegel for the winter.

Asiana is to lease two weekly slot pairs to Kuwait Airways. As a consequence, Asiana will reduce its flights to Seoul Incheon from daily to five times weekly.

In other recent route news:

Flybe is to operate its route from London Heathrow to Guernsey year-round. It was initially planned to operate for the summer season.

TAP Air Portugal is to suspend London City – Lisbon and Porto from Saturday 26 October 2019.

Continue reading “Monday Briefing – 2 September 2019”

London Air Travel » Monday Briefing

Welcome to our Monday Briefing for the week beginning 15 July 2019.

The Monday Briefing Takes A Summer Break

This will be the last Monday Briefing for a few weeks as it takes a break for the summer.

Does this mean a quiet summer? Not at all. Next week we begin a special series for the summer which will run until late August.

The Monday Briefing will return on 2 September 2019. We will of course report any major stories throughout the week as normal.

In terms of things to be looking out for over the next few weeks:

This coming Saturday, 20 July 2019, the Red Arrows will perform a fly past with a BA 747 in BOAC livery at the Royal International Tattoo.

Next Monday, 22 July 2019, BALPA’s ballot for industrial action at BA closes. It is likely that BALPA will announce its intentions immediately after the result of the ballot is known.

BA’s first Airbus A350-1000, G-XWBA, is expected to arrive at London Heathrow next week and we should see the first official pictures of the actual cabin interior.

Milan Linate airport will close for three months from Saturday 27 July 2019. Alitalia will transfer all Linate routes to Milan Malpensa. BA will also operate from London City to Milan Malpensa.

International Airlines Group announces its half-year results on Friday 2 August 2019. Given last week’s announcement that the Information Commissioner’s Office intends to fine BA £183m, Willie Walsh no doubt has a lot say about the matter but given a pending appeal and numerous group litigation actions, he may have to bite his tongue.

Qantas announces its annual results on Thursday 22 August 2019. Qantas usually has something to announce with its annual results. Whilst this may be too soon for a final announcement on whether it will place an order for aircraft to fly non-stop from London to Sydney and Melbourne, we should at least learn of the project’s progress.

Continue reading “Monday Briefing – 15 July 2019”

London Air Travel » Monday Briefing

Hello and welcome to our Monday Briefing for the week beginning 8 July 2019.

Connect Airways Bid For Flybe Approved

The Connect Airways bid for Flybe was approved by the European Commission on Friday.

Although the takeover completed some months ago, Flybe has been effectively “held separate” and remained operationally independent from the consortium until now.

As a condition of approval, the European Commission has required Connect Airways to make available five daily slot pairs at Amsterdam Schipol and three daily slot pairs at Paris Charles de Gaulle to any entrant wishing to fly from these airports to Birmingham International.

The airline will eventually operate under an as yet unspecified Virgin brand. It will be no surprise to anyone with a cursory knowledge of Flybe’s operation over the past few years that it is likely to be some time before a rebranding takes place.

On the subject of regional flying, it’s worth noting that in the slot allocation reports from Airport Coordination Ltd for the winter season that Loganair has, albeit unsuccessfully this time, put in a request for 42 weekly slots at London Heathrow.

Also unsuccessfully bidding for slots at Heathrow were China Airlines, Luxair, JetBlue and SpiceJet.

Singapore Airlines Lounge Revamp

Singapore Airlines is to spend £30 million revamping its lounges at Terminal 3, Singapore Changi Airport.

The airline has commissioned Hirsch Bedner Associates to redesign its SilverKris and KrisFlyer Gold lounges. The airline promises a 30% increase in capacity.

Singapore Airlines promises that passengers travelling in First Class and Suites will enjoy a new Private Room with a full service fine dining section and a new First Class lounge with a new Flagship Bar.

The Business Class lounge will be expanded with a cafe, dining hall and a full service bar.

The refurbishment will be carried out in four phases starting in August 2019 and is expected to complete by mid-2021. In spite of its reputation, Singapore Airlines has never been lauded for its lounges, so it will be interesting to see how these turn out.

Singapore Airlines’ lounges in Terminal 2 of Singapore Changi are not affected by these works.

Continue reading “Monday Briefing – 8 July 2019”

London Air Travel » Monday Briefing

Hello and welcome to our Monday Briefing for the week beginning 1 July 2019.

KLM Celebrates 100 Years

British Airways is not the only airline celebrating a centenary this year.

Monday 7 October 2019 will mark the 100th anniversary of the founding of KLM in 1919, ahead of its first flight in May 1920.

In a rather pointed reference, KLM says: “On 7 October, KLM will become the world’s first airline still operating under its original name to mark its 100^th anniversary.”

The centenary celebrations launched at an official event at Amsterdam Schiphol on Saturday. Yesterday, KLM also took delivery of its first Boeing 787-10 aircraft “Orange Blossom”.

There’s a dedicated microsite with a history of KLM at KLM100.

Fleet News

There were quite a number of fleet developments in the past week:

Staying with KLM, its parent company Air France-KLM announced a reallocation of future deliveries of Airbus A350-900 and Boeing 787-10 aircraft between Air France and KLM. 6 Boeing 787s intended for Air France will be delivered to KLM, taking its total Boeing 787 fleet to 27 aircraft. 7 Airbus A350-900 aircraft ordered for KLM will be transferred to Air France. The Airbus A350-900 will enter service at Air France in October.

BA retired one of its Boeing 747s, G-BNLN, last week. This leaves 33 Boeing 747 aircraft in service at BA.

IAG announced that it has converted two Airbus A320neo options into firm orders for Iberia. These will replace existing Airbus A320ceo aircraft and will be delivered in 2021.

If Apple designed aircraft cabins?

As has been widely reported, Apple’s Chief Design Officer, Sir Jony Ive is leaving the company after 30 years to set-up is his own creative business, LoveFrom.

Marc Newson will also join the new firm from Apple. Marc has significant aviation experience having been Creative Director for Qantas from 2005 to 2015.

Projects for Qantas included its first lie flat seat the “SkyBed”, cabins for the Airbus A330 and A380 aircraft, as well as its acclaimed international First Class lounges in Melbourne and Sydney.

There has been no shortage of innovation in premium cabins and lounges over the decades. However, there are still areas ripe for change.

Whilst there has been talk of bunk beds and some attempts such as short-lived economy seat that reclines without intruding into the space of the passenger behind, no airline has managed to fundamentally reinvent the experience of economy passengers.

Jony Ive no doubt has a fair few air miles under his belt and a collaboration with Marc Newson, subject to willing clients of course, could produce interesting results.

Continue reading “Monday Briefing – 1 July 2019”