London Air Travel

London Air Travel » Page 102

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

IAG confirms interest in Norwegian

The big story this week has of course IAG’s expression interest in Norwegian.

As reported last week, there is very little that is known at the moment, beyond the fact that IAG has acquired a 4.61% stake in Norwegian. However, that will not stop us indulging in speculation and guesswork.

According to The Sunday Times IAG had been quietly building up its stake over a period of time. Both IAG and Norwegian were clearly caught by surprise when Bloomberg first broke the story.

If IAG does ultimate acquire Norwegian, it would be the fourth airline to join IAG since its original formation after Aer Lingus, bmi and Vueling.

It can be said that confidence that IAG has been studying Norwegian for quite some time and this bid is the sort of “transformational” acquisition of a strong brand that leads a market segment that IAG seeks. IAG will also disregard what it would call “noise” in the press, online and from other quarters about any bid.

In terms of what happens next, it is worth recalling that IAG’s first approaches to Aer Lingus and Vueling were rebuffed. IAG’s negotiations with Lufthansa to buy bmi were punctuated by counter-bids and protests from Virgin. The original merger of BA and Iberia which led to the formation of IAG was also dogged by uncertainty as to whether it would go ahead.

What is unique about a possible Norwegian bid is the strength of the brand in both its home market and in the UK. Neither Iberia nor Vueling have made any significant in roads into the UK market under IAG. Indeed, both airlines have suspended some routes from London. There is no question that IAG would maintain the Norwegian brand given its strength in Northern Europe. The most significant question is what happens at Gatwick.

Norwegian has built up a significant operation at Gatwick with approximately 40 departures a day and whilst there would no doubt be a review of Norwegian’s operations at the airport, it is far from certain they would all be subsumed into BA. When IAG bought bmi in 2012, even though it seemed obvious that it would be merged into BA, some at IAG were pressing for it to remain separate and BA pilots offered productivity concessions for the two operations to be merged.

There has also long been the question as to whether a “twin brand” approach as per Qantas/Jetstar is a better approach for BA as opposed to trying to compete with low cost carriers whilst still trying to maintain its premium positioning. However, these decisions will ultimately be made by IAG, not BA.
Continue reading “London Air Travel’s Monday Briefing – 16 April 2018”

London Air Travel » Page 102

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

Etihad scales back

For a time it seemed that the world of air travel had pivoted permanently towards the Middle East, specifically the “Big Three” airlines Emirates, Etihad and Qatar Airways who were set on a path of exponential growth in perpetuity.

With a relatively favourable operating environment and Government support on their side, it seemed that all these airlines needed to do was announce headline grabbing aircraft orders at air shows, run celebrity endorsed ad campaigns highlighting their capacious and luxurious cabins and they would able to syphon off ever more passengers on to ever more routes to their respective hubs.

And one of the most successful indicators of this strategy in Europe has been the volume of passengers flying from UK regional airports, bypassing hubs in Europe.

However, proving that the world of air travel is anything but predictable, Etihad has experienced a considerable downturn in its fortunes. In part, this is due to its disastrous strategy of buying minority stakes in failing European airlines. Etihad has confirmed to the media (BBC News) that it will suspend flights from Edinburgh to Abu Dhabi from October of his year.

Etihad has also recently suspended Abu Dhabi – Dallas Fort Worth, in this case pointing the finger of blame at American Airlines for withdrawing a codeshare agreement.

Continue reading “London Air Travel’s Monday Briefing – 9 April 2018”

London Air Travel » Page 102

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

Rest assured, there are no April Fools stories in this update.

BA suspends London Gatwick – Oakland

Over the past 18 months or so, BA has had its sights set firmly on taking on Norwegian at Gatwick.

It reinstated London Gatwick – New York JFK and added Fort Lauderdale and Oakland at Gatwick to take on Norwegian head to head.

It has also begun to “densify” its Boeing 777 fleet so that, according to BA, it will have a lower seat cost than Norwegian’s fleet of Boeing 787s.

Last week it emerged that taking on Norwegian at Gatwick may not be as straightforward as first thought. BA has announced that Oakland is suspended from Monday 22 October 2018.

This is all BA has said so far. It is not clear whether the route may return on a summer seasonal basis in 2019. BA has also not issued any rebooking guidance to passengers.

Whilst Norwegian can claim a victory in this instance, its own financial and operational performance remains under scrutiny. Passengers flying from Gatwick to New York JFK in particular have been beset by cancellations and delays. The performance of recently launched routes from Gatwick to Austin and Chicago will also provide an indication of how much more scope there is to grow on North Atlantic routes.
Continue reading “London Air Travel’s Monday Briefing – 2 April 2018”

London Air Travel » Page 102

Hello and welcome to our Monday Briefing for the week beginning 26 March 2018, summarising the main developments in air travel over the past week, and a look the week ahead.

Qantas completes inaugural non-stop Perth – London flight

There will no doubt be a great sense of relief at Qantas that its inaugural flight from Perth to London Heathrow, with a fuselage brimming with journalists and politicians, went without a hitch.

Alas, our invitation to the inaugural flight was lost in the post. However, you can read first hand accounts from Natalie Richards of The West Australian and this video report from Beau Pearson of Network Ten Australia:

EPIC FLIGHT: The first ever non-stop commercial flight between Australia and Europe has just touched down in London. #TenNews @BeauPearson pic.twitter.com/WrGx8mORSn

— TEN Eyewitness News (@channeltennews) March 25, 2018

Qantas CEO Alan Joyce told the Sydney Morning Herald that non-stop flights to Paris are under consideration, subject to the performance of London – Perth.

Many UK journalists will be on board the inaugural London – Perth flight QF10 which left Heathrow at 13:09 Sunday afternoon and should arrive in Perth at around 06:00 BST / 13:00 AWST. They will no doubt be filing their own reports shortly after landing.

Qantas is naturally upbeat on forward bookings for the route. Whilst airlines never give away exact numbers on the performance of individual routes we should know in a couple of months from Civil Aviation Authority data how the route is performing in terms of passenger numbers.

Qantas has also opened a new international transit lounge in Perth dedicated to passengers transiting in Perth when travelling on QF9/Q10 services from/to Melbourne and passengers travelling from Perth to London.
Continue reading “London Air Travel’s Monday Briefing – 26 March 2018”