Monday Briefing – 6 August 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

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IAG & Norwegian
IAG & Norwegian

Hello and welcome to our Monday Briefing for the week beginning 6 August 2018, summarising the main developments in air travel over the past week, and a look to the week ahead.

Has IAG really given up on Norwegian?

IAG released its half-year results last week. As did Air France-KLM and Lufthansa.

Much of the press picked up on comments by IAG CEO Willie Walsh that it planned to sell its shares in Norwegian if talks don’t move forward, which they have yet to do. Does this really mean IAG has given up on Norwegian?

Don’t bet on it. Whilst IAG is unlikely to make a hostile take-over bid for Norwegian, it can be said with confidence that it has been studying for Norwegian for quite some time. Regardless of what happens with its shareholding, I would suspect IAG will sit this one out.

Air France-KLM and Virgin Atlantic

Air France-KLM Virgin Atlantic joint-venture (Image Credit: Air France-KLM)

Two weeks ago, we reported on proposals for Air France-KLM and Virgin Atlantic to operate a combined transatlantic joint-venture with Delta.

Air France-KLM has confirmed that the planned launch date is 1 April 2019. Air France-KLM and Virgin Atlantic are to also explore co-operation on non-North Atlantic routes. This is a logical progression of Air France-KLM soon becoming a shareholder in the airline. It would help Virgin Atlantic compensate for its lack of non-North American routes. Assuming it goes ahead, together with reciprocal frequent flyer recognition, this would help Virgin and Air France-KLM become a much stronger competitor in the UK market, particularly in UK regional airports.
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Monday Briefing – 30 July 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

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Star Alliance Connection Service
Star Alliance Connection Service (Image Credit: Atomic London for Star Alliance)

Hello and welcome to our Monday Briefing for the week beginning 30 July 2018, summarising the main developments in air travel over the past week, and a look to the week ahead.

Is the aviation industry heading for its next crisis?

The notoriously cyclical aviation industry has had a relatively good run of late.

There have been some failures such as Air Berlin and Monarch, and there are others that are clearly struggling. However, the majority of major airlines have experienced consistent profitable expansion. Alitalia, of course, continues to manage to suspend economic reality and survive in a financial theme park of its own.

Buoyant demand and relatively low fuel prices combined with new aircraft have facilitated a significant number of new routes, notably on transatlantic. BA continues to add more Boeing 787 routes, with the launch of Pittsburgh in April 2019.

However, there was a string of bad news from airlines around the world last week.

American Airlines announced a 45% fall in its 2nd quarter pre-tax profit to $769m. The principal cause is its fuel bill which has increased by more than 40% (approximately $2 billion) this year.

Ryanair, whose pilots are due to strike again this coming Friday 3 August, reported a 20% fall in first quarter profit to €319 million. Ryanair cited a shopping list of fuel prices, weather, Air Traffic Control strikes and the World Cup. Ryanair has also issued protective notices to its pilots and cabin crew that it plans to cut the number of aircraft at its Dublin base this winter from 30 to 24.

Singapore Airlines, widely regarded for having a near impeccable financial track record, reported a 52% reduction in operating profit for its first financial quarter.

There were similarly subdued updates from Flybe and WizzAir. There are signs that at the very least capacity growth is moderating. Most airlines should be able to absorb higher fuel prices. However, should this be combined with a demand shock, there could be trouble ahead.

On a related note, International Airlines Group reports its 2nd quarter financial results this coming Friday.

Sunday Times: Thomas Cook mulls sale of airline

The Sunday Times has reported Thomas Cook is considering a partial sale of its airline to help pay down debt.

At Gatwick, Thomas Cook has a relatively small long-haul presence, serving Cancun, Cayo Coco, Holguin, and Orlando, It also has a number of short-haul routes. It has also built up a substantial long-haul presence at Manchester serving Boston, Cancun, Los Angeles, New York, Orlando, San Francisco and Seattle.

The Sunday Times’ track record of aviation business stories citing “industry sources” is patchy at best. However, very often these stories are deliberately leaked (with a non-denial denial on the record) to drum up interest from potential buyers.
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Monday Briefing – 23 July 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

HiFly Airbus A380 in Save the Coral Reefs livery
HiFly Airbus A380 in Save the Coral Reefs livery (Image Credit: HiFly / Mirpuri Foundation)

Hello and welcome to our Monday Briefing for the week beginning 23 July 2018, summarising the main developments in air travel over the past week, and a look to the week ahead.

Delta, Air France-KLM & Virgin Atlantic’s New Joint-Venture

Delta, Air France-KLM and Virgin Atlantic have submitted a request for regulatory approval from the Department for Transportation in the US to combine their two respective transatlantic joint-ventures.

The submission, set out in more detail here, gives a flavour of what to expect in the UK from the combined joint-venture:

– The airlines have expressed a desire to co-locate at London Heathrow. Given Virgin Atlantic’s significant investment at Terminal 3, this would most likely mean Air France and KLM moving from Terminal 4 to 3. This is of course subject to Heathrow being able to accommodate such a move.

– Virgin Atlantic will codeshare on Air France and KLM flights from UK airports to their respective hubs in Paris Charles de Gaulle and Amsterdam.

– Virgin Atlantic will also codeshare on Air France and KLM flights around the world, thus offering significantly more booking options to Virgin Atlantic passengers.

– Virgin Atlantic will retain its own frequent flyer programme, but with earning and redemption opportunities on Air France and KLM flights.

It should be emphasised that these are broad-brush submissions. Once regulatory approval has been obtained, these are likely to be rolled out progressively as there is a lot of detail to be worked through. Indeed, it took a year from the airlines announcing their plans to combine their joint-ventures to agreeing commercial terms between themselves.

A clear theme is a desire/need for Virgin Atlantic and Delta to be a stronger competitor against BA and Oneworld at London Heathrow and in the UK market, particularly for corporate customers and frequent flyers.

The combined joint-venture sees it itself as a much stronger competitor in UK regional airports by offering competitive connections via Amsterdam and Paris Charles de Gaulle.

Air France and KLM can also compensate for Virgin’s relatively weak non-US network where it can offer codeshares to a very large number of worldwide destinations. Indeed, Air France and KLM serve very many destinations in Africa and Asia that are not served by BA.

It will be interesting to see how BA and American Airlines respond, both at London Heathrow and at UK regional airports.
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Monday Briefing – 16 July 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

Iberia Airbus A350-900 (Image Credit: Airbus)
Iberia Airbus A350-900 (Image Credit: Airbus)

Hello and welcome to our Monday Briefing for the week beginning 16 July 2018, summarising the main developments in air travel over the past week, and a look to the week ahead.

Farnborough Air Show

The Biennial Farnborough Air Show gets under way this week.

Historically, this been the stage for muscular displays of headline grabbing aircraft orders, notably from Middle Eastern airlines. With Emirates parking aircraft and Etihad downsizing its route network, some of the blockbuster orders of the past are unlikely to be repeated.

Judging by news coverage over the past few days, the UK press has clearly been briefed in advance about possible Government announcements to reinforce its commitment to aviation and space technology after the UK leaves the European Union. It has already announced on Sunday funding for horizontal and vertical spaceports around the UK. However, this will not make the very real issues surrounding the UK’s departure from the EU, such as pan-European supply chains, regulation and traffic rights, go away.

As far as aircraft orders are concerned, commentators will tally up the relative numbers of orders for Airbus and Boeing. Last week Airbus officially launched the Airbus A220, which is effectively the Bombardier C-Series rebranded, and it will no doubt be keen to announce more orders in addition to JetBlue’s order last week.

BA has never been one to announce orders at aircraft shows. That said, it is known that its parent company IAG is in discussions with Airbus and Boeing on an aircraft order, so you never know.

Iberia’s A350-900 comes to London Heathrow this Friday

Iberia’s first A350-900 aircraft will be operating selected flights on the London Heathrow – Madrid route from this Friday 20 July 2018 until Friday 3 August 2018:

Flight BA7058 / IB3166 Depart Madrid 15:55 – Arrive London Heathrow 17:20
Flight BA522 / IB3167 Depart London Heathrow 18:50 – Arrive Madrid 22:15

It will then resume from Monday 23 August to Tuesday 31 August 2018. This is to allow pilots and cabin crew to become familiar with the aircraft before it begins long-haul operations. Note this may be subject to change at short notice.

Iberia has yet to unveil images of the A350 cabin interior. When Iberia does so, it should provide some clues to what to expect when BA takes delivery of the Airbus A350-1000 next year. This is at least as far as economy, premium economy and in-flight entertainment are concerned. However, BA is expected to have a different business class cabin.
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Monday Briefing – 9 July 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

British Airways World Cup Boarding Pass (Image Credit: Ogilvy & Wavemaker UK for British Airways)
British Airways World Cup Boarding Pass (Image Credit: Ogilvy & Wavemaker UK for British Airways)

Hello and welcome to our Monday Briefing for the week beginning 9 July 2018, summarising the main developments in air travel over the past week, and a look to the week ahead.

BA’s “Football’s Coming Home” Boarding Pass

If you were on Twitter and Facebook on Saturday you couldn’t have failed to have noticed BA’s “Football’s Coming Home” boarding pass.

Designed by BA’s ad agency Ogilvy and WaveMaker and carefully navigating FIFA World Cup branding restrictions, it features many references including Gareth Southgate, 1966, 52 Years of Hurt and Wembley. A clever and timely execution of a simple idea.

Pedants will of course note it has been some time since BA last used colour printed boarding passes and a long time ago there were different colour prints depending on class of travel.

On a related note, Ogilvy have only been BA’s main advertising agency until relatively recently and we have yet to see any “Masterbrand” creative work from them, which is awaited with interest.

Heathrow Releases Its Summer Film “Out Of Office”

Heathrow has released a new summer advertising campaign.

Directed by Tom Green of Stink Films, the 40 second advertisement features a mother setting her Out Of Office message whilst her two children play in the departures area before they travel to an unspecified destination.

The airport has previously run “Masterbrand” advertisements at Christmas but this is, we think, its first film of this type for the summer. Like the Christmas ads, it is produced by Havas London.

The TV ad will be supported by an outdoor advertising campaign by renowned portrait photographer Christopher Anderson.

Given how summers used to be at Heathrow ten plus years ago, this is another sign of how much Heathrow has evolved as both an airport and a consumer brand.
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Monday Briefing – 2 July 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

Heathrow Expansion CGI Image
Heathrow Expansion CGI Image (Image Credit: Heathrow)

Hello and welcome to our Monday Briefing for the week beginning 2 July 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

Heathrow Third Runway

The third runway at Heathrow received parliamentary approval last week. A number of local councils in London, supported by the Major of London, Sadiq Khan, are to seek a judicial review of the Government’s decision.

As far as we’re aware legal proceedings have not yet formally started. As mentioned last week, a judicial review is not easily won. That said, it is highly likely that there will be many more challenges to the Government’s decision, and not just in the courts.

A third runway will be in operation by 2026 at the very earliest. Given that nearly 10 years ago, BA was planning for a new runway to be operational by now, you would be forgiven for having your doubts.

Heathrow is keen to talk up the prospect of new links to UK regional airports operated by Flybe, easyJet opening a base at Heathrow, and direct links to more cities in Asia.

However, 8 years is a very long time in aviation. At Heathrow alone in that time we have lost bmi British Midland, which once held nearly 15% of the airport’s slots. Virgin Atlantic has substantially scaled back its route network outside of North America (more on that below). The number of US airlines serving Heathrow went from 2 to 5 and back to 3. International Airlines Group did not exist.

If we were take some predictions:

Whilst much has been made about the prospects of new routes to China, geography is not on Heathrow’s side. It is too far west to pick up connecting traffic from mainland Europe, something of course Finnair has exploited to great advantage at Helsinki. Most long-haul routes will be westbound as this is Heathrow’s natural geographic advantage and due to economic and cultural ties between the UK and USA.

Whilst many new slots will inevitably go to new entrants and to new UK regional routes, a big area of activity is likely to be incumbent airlines seeking more advantageous timings.

For all the talk about luxury and lounges online, it is easily forgotten that business travellers are time sensitive. It is in the relatively pedestrian area of schedules that airlines actually compete. A lot of airlines are likely to seek more advantageous slot timings with arrivals in the crucial early morning period for business travellers. This is the biggest competitive advantage BA has over other airlines at Heathrow and, arguably the biggest threat to it from a third runway.
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Monday Briefing – 25 June 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

Heathrow Expansion CGI Image
Heathrow Expansion CGI Image (Image Credit: Heathrow)

Hello and welcome to our Monday Briefing for the week beginning 25 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

Heathrow Third Runway Vote

The House Of Commons will vote on the Government’s Airports National Policy Statement this afternoon, which proposes a third runway at London Heathrow.

The Conservative party has issued a “three line whip” for its MPs to vote in favour. The Labour Party has allowed its MPs a free vote, though its front bench is not in favour of a third runway. The trade union Unite, which is a significant donor to the Labour Party, has come out in favour of the third runway.

The Conservative party position has prompted Gregs Hands, MP for Chelsea & Fulham, to resign from the Government as minister for trade policy.

Estimates on Sunday evening are that around 15 Conservative MPs will vote against the Government and that around 100 Labour MPs will defy their front bench to vote in favour of the runway.

There has been a deafening silence from Boris Johnson, MP for Uxbridge and South Ruislip, who said in 2015 “I will lie down in front of those bulldozers and stop the construction of that third runway.” Boris Johnson is reported to be out of the country at an undisclosed location.

Irrespective of the outcome of the vote, there will be a judicial review which is supported by the Mayor Of London, Sadiq Khan. A judicial review is a legal challenge, not to the actual merits of the third runway itself, but the manner in which the Government reached its decision. It is an expensive process that is not easily won.

There is also disquiet about the cost of the third runway, notably from BA’s parent company, International Airlines Group.

Assuming there are no further obstacles, construction of the third runway could begin in 2021.

Craig Kreeger to retire from Virgin Atlantic

In 12 months’ time, Virgin Atlantic will be different in many ways from today.

It should have taken delivery of its first Airbus A350-1000 aircraft. It should have launched, or at least be close to launching, a new expanded transatlantic joint-venture with Air France-KLM and Delta.

Perhaps more significantly, Delta should be the single largest shareholder as Sir Richard Branson is due to sell a 31% stake in the airline he founded to Air France-KLM.

Virgin will also have a new CEO, Shai Weiss, who will replace Craig Kreeger from 1 January 2018. Craig Kreeger was the architect of Virgin’s “Plan to Win” which was intended to achieve record levels of profitability this year. That has proved elusive, thanks to a number of factors, notably Boeing 787 engine issues. Virgin is due to launch a new business plan “Velocity” next year. Details are scant at the moment, but given that Virgin is some distance from consistent profitability, further changes to the business are expected.

Hoovering Up Avios

For a long time there has been a huge industry on both sides of the Atlantic dedicated to squeezing out every last possible frequent flyer mile at every opportunity.

In Europe this has been aided in part by the adoption of the “Avios” currency across a number of frequent flyer programmes, notably BA Executive Club and Iberia Plus. In addition, there is ability to move Avios between these programmes and take advantage of arbitrage opportunities.

Iberia sparked a frenzy this week by launching a seemingly too good to be true promotion whereby 9,000 bonus Avios would awarded for flights booked on the airline, subject to a cap of 90,000 Avios. 90,000 Avios is enough for a return flight to New York in BA Club World (travelling off peak and subject to a surcharge of nearly £500).

Bonus frequent flyer promotions are nothing new. However, this was unusual in that the Avios are awarded immediately and won’t be forfeited if the flights are not taken, meaning passengers can book the cheapest possible flights anywhere on Iberia’s network and effectively throw away their tickets. This is a radical break with convention. The Avios do expire if not used by December of this year, but this appears to be circumvented by transferring them to another account eg BA Executive Club. (At some point in the future, a single “Avios Bank” will be introduced across all Avios frequent flyer programmes.)

In spite of the relatively short promotional period (which has now ended), it has attracted a huge amount of attention worldwide. It must have prompted booking activity far beyond what could have been expected. It does have shades of Hoover’s notorious free flights promotion. Suspect this will be one to watch.

About the Airbus statement

The news agenda in the UK on Friday last week was dominated by a statement by Airbus that a “No Deal” Brexit would severely impede its ability to do business in the UK.

The announcement was met with either nonchalance and surprise concern from politicians. This is despite the fact that MPs had just waved The EU Withdrawal Bill through the House Of Commons which ruled out the UK staying in the European Economic Area, the Single Market and Customs Union.

Be under no illusion, Airbus is only stating publicly what it and businesses in many other sectors have said in private to Government for two years.

At this stage, it is impossible to predict how the current Brexit impasse will be resolved. However, that a strategically important European business like Airbus felt the need to go public and the dismal response is a damning indictment of Britain’s political class, on both sides of the House of Commons.

Also of note this week:

Airlines for Europe rails against Air Traffic Control strikes in Europe. (Airlines for Europe)

Cathay Pacific receives its first Airbus A350-1000 aircraft. (Cathay Pacific)

Etihad introduces a programme to second pilots to Emirates. (Reuters)

The Financial Times interviews Norwegian founder and CEO Bjorn Kos amid continued speculation about the airline’s future. (Financial Times)

How to miss a flight. (Financial Times)

Virgin Atlantic reflects on 34 years of its Flying Lady. (Virgin Atlantic)

Late Post Publication Updates:

[Reserved for updates during the day.]

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Monday Briefing – 18 June 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

BA Boeing 787 at British Airways Maintenance Cardiff
BA Boeing 787 at British Airways Maintenance Cardiff (Image Credit: British Airways)

Hello and welcome to our Monday Briefing for the week beginning 18 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

BA Grounds 7 Boeing 787 Dreamliner Aircraft

BA has now grounded 7 of its 28 strong Boeing 787 Dreamliner fleet.

2 Boeing 787-8 aircraft have long been grounded. 5 Boeing 787-9 aircraft were grounded almost simultaneously a little over a week ago.

Rolls Royce also announced last week that checks may be required on “Package B” engines as well as “Package C” engines. BA has not made any public statements since the latest Rolls-Royce announcement. However, IAG CEO Willie Walsh has not hidden his dissatisfaction with Rolls-Royce and the latest announcement will not instil confidence.

We have summarised the impact on BA’s operations here. The Seattle Times has an excellent article on the broader industry issues affecting all aircraft and engine manufacturers.

Etihad Reviews Aircraft Orders

Etihad has announced a loss before exceptional items of USD$ 1.52 billion for 2017. This compares to a loss for USD$ 1.95 billion for 2016.

These headline figures are only for the airline’s core operations and do not include losses from exceptional items or investments. The group has of course been beset by its disastrous strategy of buying minority stakes in airlines, notably Air Berlin and Alitalia.

Etihad has already undertaken a number of network changes including the suspension of Dallas Fort Worth, Entebbe, Jaipur, San Francisco, Tehran, and Venice.

It is now reported to be in discussions with aircraft manufacturers to review its aircraft order book, which is substantial. Etihad has 21 Boeing 787-9, 30 Boeing 787-10, 25 Boeing 777X and 62 Airbus A350 wide body aircraft on order. Given recent network developments, it is likely that any new aircraft will only act as replacement for retiring aircraft. Therefore, it is implausible that a large number of these orders won’t be cancelled.
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Monday Briefing – 11 June 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

Her Majesty The Queen officially opens Gatwick on 9 June 1958; the North Terminal on 18 March 2018; Gatwick check-in area 1958
Her Majesty The Queen officially opens Gatwick on 9 June 1958; the North Terminal on 18 March 1988; Gatwick check-in area 1958 (Image Credit: London Gatwick)

Hello and welcome to our Monday Briefing for the week beginning 11 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

Qatar Airways now operating for BA

Qatar Airways is now operating selected long-haul flights for BA.

It is operating all BA flights to Kuwait until 30 June / 1 July, Muscat until 20 / 21 August, as well as one of its two daily flights to Dehli, also until 20 / 21 August.

All flights are being operated by Airbus A330-200 aircraft in a two class configuration. Qatar has sent three aircraft to Heathrow for these flights.

It is worth noting that since BA first published rebooking guidance for passengers, this has been updated.

Passengers in Club World can also fly to Kuwait and Muscat via Abu Dhabi on Etihad by connecting from a BA flight from London Heathrow to Abu Dhabi. Club World passengers due to fly to Delhi can also fly on Air India by connecting from one of BA’s own services from London Heathrow to India.

According to publicly available flight data, two out of ten BA Boeing 787-8 aircraft have been out of service for some weeks (Registrations G-ZBJD & G-ZBJE). At the time of writing, four out of eighteen BA Boeing 787-9 aircraft have not flown since at least Friday 8 June 2018 (Registrations G-ZBKC, G-ZBKJ, G-ZBJK & G-ZBKO).

The following flights also remain cancelled:

– BA280 / BA281 London Heathrow – Los Angeles until Thursday 5 July 2018
– BA278 / BA279 London Heathrow – San Jose until Sunday 17 June 2018
– BA5 / BA6 London Heathrow – Tokyo Narita until Tuesday 26 June 2018

Update: Rolls-Royce has this morning issued an update advising that a similar component issue to the one in “Package C” Trent 1000 engines has been found in some “Package B” engines. Therefore, precautionary checks will be carried out on these engines. This is likely to lead to further disruption.

IAG CEO Willie Walsh speaks at the IATA AGM

IATA held its Annual General Meeting together with the World Air Transport Summit in Sydney last week. It did of course generate a lot of headlines for the wrong reasons.

Although many airline CEOs were in attendance, as most of them lead public companies, they can’t actually say much beyond what they have already told their investors. IAG CEO Willie Walsh is always good value at a conference, expressing incredulity at Alitalia spending €7m on new uniforms whilst in administration.

The Centre For Aviation has published an interview with Willie Walsh as part of its daily publications during the event.

A couple of quotes of note on IAG’s bid for Norwegian and the Airbus A321 long range at Aer Lingus, which may ultimately be ordered by other IAG airlines such as BA:
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Monday Briefing – 4 June 2018

Welcome to our weekly Monday Briefing on the main developments in air travel in London and around the world, as published every Monday morning at 06:00 BST.

London Air Travel » Monday Briefing

Fiji Airways & Oneworld Connect
Fiji Airways & Oneworld Connect (Image Credit: Oneworld Connect)

Hello and welcome to our Monday Briefing for the week beginning 4 June 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

Oneworld introduces “Oneworld Connect” membership

Ever since International Airlines Group acquired Aer Lingus there has been the perennial question as to when the airline would rejoin the alliance after it left in 2007.

In spite of early promises that Aer Lingus would rejoin the alliance, there appears to be no evidence of any imminent activity.

Perhaps we now have an answer. On Sunday 3 June 2018 at the IATA AGM in Sydney (fortuitously for the delegates timed to coincide with Vivid Sydney), Oneworld announced a new form of membership known as “Oneworld Connect”.

Oneworld Connect places significantly lower obligations on members. They only have to offer priority check-in and boarding to all Oneworld frequent flyers.

Other Oneworld benefits such as mileage earning and redemption and lounge access will only be offered to customers of “sponsoring airlines”, of which there must be at least three. More benefits can be offered by agreement with individual airlines.

This is clearly a tacit admission that Oneworld has gone as far as it can in securing new members. There are lots of airlines which with Oneworld members have varying levels of co-operation. Not just Aer Lingus. But also its fellow IAG subsidiary Vueling. Other potential candidates could include Air Italy, Alaska Airlines, Bangkok Airways and Royal Air Maroc.

It has also been confirmed that BA and Fiji Airways are to explore areas for co-operation. BA and Fiji Airways have already sought regulatory approval for BA to codeshare on Fiji Airways flights from Los Angeles and San Francisco to Fiji. An announcement about this could come as soon as this week.

IAG Negotiations with Airbus

When IAG released its first quarter results last month, Willie Walsh confirmed that the group was in discussions with aircraft and engine manufacturers on a new aircraft order.

It is expected that the order will be announced in the next 12 months. Talks with Boeing and General Electric were described as “particularly constructive”. And now we can see why.

Bloomberg reports that IAG has suspended talks with Airbus over an order for new Airbus A380s.

Airlines of course have regular discussions with aircraft manufacturers and conversations are leaked for a reason.

The real story here is that BA/IAG do want more Airbus A380 aircraft, but clearly not at any price.

IAG has previously mooted leasing second hand Airbus A380s, but this has evidently not come to anything. So now it’s back to looking at new aircraft. IAG has options for a further seven aircraft. Whilst Willie Walsh has suggested Airbus A380s could be deployed at Aer Lingus and Iberia, this seems unlikely. Aer Lingus doesn’t even have plans to introduce the Airbus A350.

The A380 is clearly serving BA well on major trunk routes and there is scope to add more year round capacity to more routes.

On a related note, BA took delivery of its 18th Boeing 787-9 Dreamliner (registration G-ZBKS) and its 27th Dreamliner aircraft in total on 31 May 2018. It is due to complete its inaugural scheduled passenger flight to New Orleans today. It will no doubt provide some welcome additional capacity as it addresses engine issues with the rest of is Dreamliner fleet.
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