Category: Monday Briefing

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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.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 3 May 2021.

UK Travel Restrictions

More than six months have passed since the UK government announced restrictions on international travel.

It is a near certainty that these will be lifted two weeks from today on Monday 17 May.

According to yesterday’s Mail On Sunday the government could announce as soon as this Friday the first “green list” of countries that UK citizens can visit without the need for quarantine on return. This will be under the slogan “Travel Safely; Plan Ahead”. It is reported this will be updated very three weeks. This does not provide for that many updates during the peak summer season.

The Sunday Times reported that the final list of countries is yet to be decided. Though there is speculation that Gibraltar, Iceland, Malta and Portugal will be on the green list. France, Greece and Spain are likely to on the amber list.

BA seems confident in travel restarting. It has refreshed its YouTube videos from last year on travel post COVID-19 and is running promoted social media posts.

Tourism Ministers of G20 members will also meet virtually this Thursday to discuss the restart of the travel and tourism industry.

Virgin Atlantic Results

Virgin Atlantic is often coy about publishing its financial results. True to form, it quietly slipped out its results for last year on a Friday before a bank holiday weekend.

The airline reported a loss of £659 million before tax and exceptional items for the year to 31 December 2020. Unrestricted cash fell from £353 million to £115 million.

Like all airlines at the moment, the accounts do include a going concern warning. Virgin considers that the actions taken earlier this year such as the sale and leaseback of Boeing 787 aircraft and securing further support from Virgin group will support the airline during a very gradual easing of travel restrictions in the third quarter of this year. Virgin does aim to be profitable in 2022.

IAG will also announce its first quarter results for 2021 this Friday.

South African Airways Exits Business Rescue

South African Airways has formally exited its business rescue process after nearly 18 months.

The Business Rescue Practitioners filed on Friday a notice of “substantial implementation” of a business rescue plan with the Companies and Intellectual Property Commission in South Africa.

The airline is now claimed to be solvent and has been handed over to an interim board. The Department of Public Enterprises issued a statement that the government is in negotiations with a preferred equity partner and a sale and purchase agreement should be agreed within the next few weeks.

There is currently no timetable for the airline to resume flights.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 26 April 2021.

How Has BA’s Fleet Changed Post COVID-19?

BA published its annual accounts last week. We read these things so you don’t have to. This was the first time the airline has published its own updated aircraft fleet plan post COVID-19.

It is well known that COVID-19 prompted the immediate retirement of the Boeing 747 fleet, almost five years ahead of schedule. The Airbus A380 fleet also remains grounded.

Here’s a breakdown of BA’s fleet as at 31 December 2020:

Aircraft Type	Total December 2020	Total December 2019	Change	Future Deliveries	Options
Airbus A318	0	1	-1
Airbus A319	35	39	-4
Airbus A320	80	77	3	9	10
Airbus A321	28	27	1	3
Airbus A330	0	1	-1
Airbus A350	8	3	5	10	36
Airbus A380	12	12	0
Boeing 747-400	0	32	-32
Boeing 777-200	43	46	-3
Boeing 777-300	16	12	4
Boeing 777-900	0	0	0	18	24
Boeing 787-8	12	12	0
Boeing 787-9	18	18	0
Boeing 787-10	2	0	2	10
Embraer E170	1	6	-5
Embraer E190	22	18	4
SAAB 2000	0	1	-1
Total	277	305	-28	50	70

In summary, COVID-19 has cut the size of BA’s fleet by more than 10% with aircraft reduced from 305 to 277.

Long haul aircraft decreased by 26 from 137 to 111 aircraft. This was primarily accounted for by the retirement of 32 Boeing 747 and some older Boeing 777-200 aircraft. This was offset by new deliveries of 5 Airbus A350-1000, 4 Boeing 777-300 and 2 Boeing 787-10 aircraft.

At 31 December 2020, BA still had 10 Airbus A350-1000 and Boeing 787-10 aircraft and 18 Boeing 777-900 aircraft to be delivered. In all likelihood these will be delayed. Options to acquire a further 36 Airbus A350-100 and 24 Boeing 777-900 are unlikely to exercised. The airline has previously allowed options to acquire a further 9 Boeing 787-9 aircraft to lapse.

The movement in short haul aircraft is more modest, with the fleet decreasing by just 2 to 166 aircraft. The airline continues to retire Airbus A319 aircraft and withdraw the Embraer E170 at London City.

At 31 December 2020, BA had just 9 Airbus A320neo and 3 Airbus A321neo aircraft left to be delivered. It still has options to acquire a further 10 Airbus A320neo aircraft, having allowed around 20 other options to lapse.

There are of course huge unknowns as to how many remaining aircraft will actually be brought back into service. In its base assessment on the planned return to service capacity in the first quarter of 2022 is expected to be 17% below the first quarter of 2019. A given plausible alternative scenario is a 61% reduction in capacity.

In the medium term, there is the question of whether the airline sees the Airbus A321 LR and XLR aircraft having a role. BA’s fellow IAG subsidiary Aer Lingus had ordered 8 A321 LR and 6 A321 XLR aircraft. Iberia had also ordered 6 A321 XLR aircraft.

Back to the numbers, to give an indication of how much the airline’s financial position has changed in 12 months, cash and cash equivalents fell from £2.6 billion to £1.3 billion. Meanwhile net debt increased from £3.7 billion to £7.5 billion. This includes a loan of €1.65 billion from its parent company. $750 million raised last year through the mortgaging of aircraft was repaid in December.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 19 April 2021.

Flybe Pilots Its Return

Shortly before it collapsed into administration, Willie Walsh delivered a withering verdict on Flybe: “That’s a business model that doesn’t work with shareholders that have suddenly cottoned on that they’ve bought a dog.”

That has not deterred its new owners, behind the company known as Thyme Opco Ltd, from buying the Flybe brand, intellectual property and its airport slots. Many assets such as aircraft parts and engines still rest with the administrators.

An appeal to the Secretary of State for Transport against a decision by the Civil Aviation Authority to revoke Flybe’s operating licence is underway.

It’s not clear whether the new Flybe intends to fly from Heathrow. When the former bmi remedy slots were re-advertised last year, there was a warning that the ownership of these slots is subject to a legal challenge. A subsequent report from the administrators of Flybe advised that they were challenging IAG’s appropriation of these slots after Flybe went into administration. There has been no update on this for some months.

At present, the only indicator of Flybe’s plans is fairly nondescript “Coming Soon” on the Flybe website. Whether it is operating marginal regional routes or providing feeder traffic to long haul airlines, neither have proven to be financial rewarding, let alone in the aftermath of a pandemic and aviation’s biggest crisis since the Second World War.

Archive Footage From KinoLibrary

The Kinolibrary archive hosts a vantage range of 20th century film footage.

It has in the past week uploaded to its YouTube channel, in three parts, very early 1920s films of a Handley Page G-EASN aircraft flying between London and Paris. You can see the passengers were certainly dressed for the occasion!

Also, the library has uploaded rare colour footage of Pan American World Airways from 1948 at what was formerly known as New York International Airport.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 12 April 2021.

“Summer Route Roulette”

When the UK government announced its proposed traffic light system to reopen international travel this summer, airlines made their views known very quickly.

BA extended the cancellation of short haul flights at Gatwick until 31 October. The only clue as to its summer schedule at London City, traditionally packed with flights to Ibiza and Mykonos, are two new routes to Jersey and Gibraltar.

In yesterday’s Sunday Times the challenge facing airlines was cited as analogous to a game of Russian roulette. Spend huge sums of money preparing to return aircraft and crews to service to no avail, or miss out on significant pent up demand. “We’re gambling — will we meet demand? Is there a chance we’ll lose capital?” said Shai Weiss CEO of Virgin Atlantic. Another airline CEO, speaking off the record, put it more bluntly “You might as well use the dartboard to do your strategic planning”.

Border restrictions are not the only concern of airlines. In his first media briefing as IATA Director General Willie Walsh made it clear that airlines should not have to manually process passenger documentation at airports, nor should pre flight testing become a permanent feature of international travel.

Following recent events, this week is expected to be a light week for official news in the UK. Government announcements will be limited to essential news only and most UK businesses will hold back PR activity. That said, on Wednesday the Transport Select Committee will take evidence on the Global Travel Taskforce from representatives of ABTA, BALPA, Heathrow and IATA.

easyJet will also give a half year trading update on Wednesday.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 5 April 2021.

30 Years After Pan Am and TWA At London Heathrow

This week marks 30 years since United Airlines first flew from London Heathrow, replacing Pan American World Airways.

1991 was a significant year for transatlantic travel from Heathrow. Under a treaty between the UK and US governments only BA, Pan American World Airways and Trans World Airlines could fly to the US from the airport.

All other airlines, notably Virgin Atlantic and a growing number of US airlines following the deregulation of US aviation in 1978, had to fly from Gatwick.

Both Pan Am and TWA were heavily indebted and reeling from the collapse of international travel following the Gulf War, rising oil prices and, in the case of Pan Am, the aftermath of the Lockerbie disaster.

Pan Am entered Chapter 11 bankruptcy protection in early 1991. It sought to raise around $290 million by selling its London route authorities to United. American Airlines purchased TWA’s London routes for $440 million.

London was for Pan Am in particular a major hub with it flying onwards not only to mainland Europe, but also as far afield as Bangkok, Beirut, Istanbul and Tokyo.

The sale of the routes required a renegotiation between the US and UK governments to allow American and United to fly from London Heathrow. This would otherwise render the sale of Pan Am and TWA’s route authorities worthless and cause the two airlines to collapse.

The UK government felt it had the upper hand given the pressing need for a deal. In theory, the UK was the winner as the US gave UK airlines the right to fly to the US from a limited number of countries in mainland Europe (subject to agreement from these countries), not that this is ever came to fruition until the EU-US Open Skies treaty in 2008. UK airlines also gained greater rights to to fly onwards from the US to Canada, Latin America and Asia.

An agreement to resume talks in a few months’ time to open up the US domestic market to UK airlines unsurprisingly came to nothing.

On 5 April 1991, United began flying from London Heathrow to Miami, New York JFK, San Francisco and Washington. In July 1991, American Airlines followed launching flights from London Heathrow to Boston, Chicago, Los Angeles, Miami, Newark and New York JFK.

Virgin Atlantic also started flying from London Heathrow to New York JFK and Los Angeles from July. In classic fashion, Sir Richard Branson dressed up as a pirate, covered a model BA Concorde at Heathrow with a Virgin logo and declared the airport “Virgin Territory”.

BA bristled at Pan Am and TWA being replaced by financially stronger US airlines with larger domestic route networks and Virgin Atlantic gaining access to Heathrow. It prompted the airline to launch its own mileage based frequent flyer programme, having previously been a partner of American and United’s own frequent flyer programmes.

There had already been tensions between BA and Virgin Atlantic after it gained some of BA’s weekly flights to Tokyo. The relationship would sour even further with allegations of “Dirty Tricks” by BA against Virgin.

BA Gatwick Long Haul Changes

As you may have noticed we’ve largely paused publishing articles on route and schedule changes until there is certainty as to how international travel will return.

That said on Friday, BA confirmed that flights from Gatwick to Providenciales will move to Heathrow for the summer. BA timetables also indicate that some flights to Antigua and Saint Lucia will operate from Heathrow.

Although not officially confirmed by the airline, Las Vegas and Orlando now appear to operate on a summer seasonal basis at Gatwick. Conversely, Barbados now operates from Gatwick on a winter seasonal basis. Cape Town, New York JFK and Toronto Pearson are currently suspended form Gatwick.

Thanks to SeanM1997 and To Fly To Travel on Twitter for additional information and helping to join the dots.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 29 March 2021.

Alaska Airlines Joins Oneworld

Assuming there are no last minute delays, Alaska Airlines will become a full member of the Oneworld alliance this Wednesday, 31 March 2021.

This means that members of Oneworld frequent flyer programmes will benefit from full reciprocal recognition when flying on Alaska Airlines, and vice versa.

BA of course has an existing codeshare and frequent flyer partnership with Alaska. Whilst this is a long standing relationship, the scope of the codeshares does not appear to have been refreshed for some time, particularly since Alaska acquired Virgin America.

For readers outside of the US, this is somewhat academic as travel restrictions are yet to be lifted. Whilst there have been positive soundings about a reopening in July, the UK government continues to dampen expectations about international travel this summer.

New Airlines (Almost) Ready For Take Off

You would think a global pandemic would be the worst time to launch a new airline, but aviation has always attracted dreamers and no amount of industry shocks are going to change that.

No doubt hoping to take advantage of pent up demand and unencumbered by the very high debt levels of legacy carriers, a number of airlines are planning on launching in the coming months.

EGO Airways in Italy is due to start its scheduled passenger flights this summer between regional airports such as Brindisi, Cagliari, Florence and Forli, initially with a fleet of two Embraer E 190 aircraft.

World2Fly plans to launch long haul flights from Madrid to destinations such as Cancun, Havana and Punta Cana.

Over on the other side of the Atlantic, Andrew Levy, former president of Allegiant Airlines plans to launch Avelo Air this summer. The airline was formed with the purchase of the assets of XTRA Airways in 2018. Using a fleet of Boeing 737-800 aircraft, it plans to operate between unserved city pairs in the US.

A similar approach will be adopted by Breeze Airways, led by aviation veteran and JetBlue founder David Neeleman, which is expected to confirm its plans imminently. It is expected to have a base in Salt Lake City.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 22 March 2021.

The Summer Timetable Begins

This Sunday, 28 March 2021, marks the official start of the summer timetable in the Northern Hemisphere.

Ordinarily at this time of year we should be able to present a long list of seasonal schedule changes.

Apart from BA transferring Bermuda to London Heathrow this Sunday and American Airlines launching Heathrow – Seattle on 1 April, there’s little else to confirm. There may be frequency increases to come for BA to Lahore and Tel Aviv, but these are not yet reflected in online timetables.

Airlines had been hoping that Monday 17 May would mark the reopening of international travel. Both BA and Virgin Atlantic currently plan to increase their schedules from this date.

Defence Minister Ben Wallace, who was tasked to do the Sunday political show broadcast round yesterday, said it was “potentially risky” and “premature” to book for Britons to book a summer holiday this year.

Speaking to Sophy Ridge on Sky News Ben Wallace said “We can’t be deaf and blind to what’s going on outside the United Kingdom. If we were to be reckless in any way, and import new variants that put up risk, what would people say about that?”

Members of the Scientific Advisory Group for Emergencies (SAGE) have gone further and warned in today’s Guardian that the public should not consider summer holidays until next year because of the risk of vaccine resistant variants entering the UK.

This has prompted an immediate and furious response from airline industry bodies and trade unions who see such speculation as deeply unhelpful.

The Financial Times reports that the UK government’s global travel task force is looking at reinstating a traffic light system for countries, this time based on their respective levels of vaccination. Pilot schemes with countries with high vaccination rates such as Israel and the US are also consideration. The current mandatory hotel quarantine regime may also be replaced with self-isolation at home.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 15 March 2021.

COVID-19 – One Year On

This week marks one year since global aviation went into shutdown and the world’s airlines started to suspend almost all international flights.

Closer to home in the case of BA many now suspended routes operated their last scheduled passenger flights a year ago this week.

Twelve months on, the CEOs of BA and Virgin are keen to talk up their respective prospects for the future.

In yesterday’s Independent and Sunday Times BA CEO Sean Doyle spoke of plans to add new routes to Europe and Asia.

In the case of Europe, the airline has no doubt mapped out various scenarios and is ready to push the button on new summer seasonal routes as soon as restrictions on international travel are lifted.

As far as Asia is concerned, BA has just suspended scheduled passenger routes to Kuala Lumpur, Osaka and Seoul. Although cargo only flights have continued to operate.

If truth be told, BA has been more talk than action in Asia in the past. After the global financial crisis, then CEO Willie Walsh expressed an interest in launching new leisure routes from Gatwick to Asia. Apart from a short lived extension from Male to Columbo which was suspended in 2015, nothing came of it. Almost all route expansion was westbound.

There have been reports that BA is looking to return to Dhaka, a route that was suspended in March 2009. Other Visting Friends & Relatives (VFR) routes that could be considered include Amritsar and Kolkata. Leisure routes, which will need premium traffic to support them, could include Bali, Columbo, Goa and Phuket.

To Virgin Atlantic, CEO Shai Weiss spoke to yesterday’s Sunday Times about his ambitions to bring back the spirit of a start-up to the airline, but not exactly how.

As has been widely reported, Virgin is expected this week to confirm new financing in addition to its solvent recapitalisation last year. This includes a £100m loan from Virgin group and £60m of additional deferrals of payments. When Virgin Atlantic belatedly filed its accounts for 2019, it confirmed that should travel restrictions continue to this summer it would need further financing.

Whilst airlines are pinning their hopes on international travel restarting shortly, some are expressing doubts. What are described in yesterday’s Sunday Times as “the glums” in Whitehall are pressing for mandatory quarantine to stay in place so new variants do not circulate in the UK.

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Welcome to London Air Travel’s Monday Briefing for the week beginning 8 March 2021.

From today anyone travelling from England to a destination outside the UK must complete a declaration form to demonstrate they are travelling for a “legally permitted reason”. Full guidance is available from the UK government.

If you are departing from the one of the very few flights at London Gatwick’s North Terminal you will also need to pay a minimum £5 drop off charge if arriving by car. This will apply to the South Terminal from 12 April, assuming it is open to passenger flights by then.

Doubts About Flybe’s Return

It may seem like a lifetime ago, but it is just over one year ago since Flybe collapsed.

“Thyme Opco” was established in September of last year as a vehicle to acquire the assets of Flybe and is reported to be working on plans to relaunch the airline. One director, Lucien Farrell of Cyrus Capital, a member of the consortium that previously owned the airline, resigned as a Director of the company last week.

Press reports have suggested the value of Flybe’s assets rests in the 12 Heathrow bmi remedy slot pairs it had at the time of entering into administration. These were taken back by IAG last year and have been advertised by Mazars to potential new entrants. The administrators of Flybe have advised in their official reports they are to challenge IAG’s appropriation of the slots in court.

“Heathrow – Britain’s Busiest Airport” Returns

“Heathrow – Britain’s Busiest Airport” – not that is much of an accolade at the moment – returns to ITV at 20:00 Wednesday 10 March.

The latest series does cover the operation of Heathrow during lockdown. Next week’s episode features the final departure of the Boeing 747 from the airport.

Readers in the UK can catch up with the series on the ITV Hub.

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