London Air Travel

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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.

London Air Travel » Page 2

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

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.

Monarch

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.

London Air Travel » Page 2

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.

Aigle Azur

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.

Air Berlin

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

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.