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London Air Travel’s Monday Briefing – 15 April 2019

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

Jet Airways

There is a book to be written about Etihad’s string of disastrous minority investments in airlines.

In near repeat of Swissair’s Qualiflyer alliance, almost every one has been an unmitigated failure: Air Berlin; Alitalia. And of course Jet Airways. It’s not as if there were no warning signs. Alitalia had been through numerous recapitalisations. Many European airlines that could have bought Air Berlin outright had declined to do so.

Jet Airways has long been insolvent and by any standard should have ceased trading some time ago, let alone continue to take forward bookings which after a brief pause over the weekend it is now continuing to do. Over the weekend, hundreds of Jet Airways employees have protested outside New Delhi and Mumbai airports against unpaid salaries – a reminder of the significant human cost of the airline’s troubles.

The one sensible thing Etihad did was take ownership Alitalia and Jet Airways’ Heathrow slots. Jet Airways’ three daily Heathrow slot pairs are to be returned to Etihad and its intentions should become clear in the next couple of weeks.

Virgin Atlantic wants to be loved

Virgin Atlantic launched its latest Upper Class cabin with typical fanfare last week.

There was less positive news when the airline revealed another financial loss. Worse still, the airline does not expect to return to profitability until 2021.

Virgin Atlantic’s ambition is now to be “the world’s most loved travel company”. It has a new three year business plan “Velocity” which runs until 2021. Green joins purple and red in its colour scheme to signify its commitment to sustainability. Virgin is also promising much greater integration between Virgin Atlantic and Virgin Holidays.

As well as taking delivery of four Airbus A350-1000 aircraft this year, it will reduce the number of Airbus A340 aircraft from 7 to 3 this year. The remaining 3 have been taken under the airline’s ownership.

The Connect Airways consortium expects to secure regulatory approval for its purchase of Flybe in the third quarter of this year. It is at this point the consortium can exercise financial and operational control over Flybe. In the interim, the consortium has provided Flybe with £135m of funding to maintain the airline’s operations.

In case you missed it:

JetBlue publicly states its ambition to fly from London from 2021. (London Air Travel)

Also of note this week:

Qantas’ CEO of Qantas International Alison Webster abruptly departs the airline. (Sydney Morning Herald)

Qantas looks at the work of its in-house meteorologists. (Qantas)

UK domestic flights fall 20% in a decade. (Financial Times)

Jet Airways Suspends London – Mumbai / New Delhi

Jet Airways has now removed flights from London Heathrow to Mumbai and New Delhi from sale indefinitely.

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Following the cancellation of Jet Airways’ flights from London Heathrow to Mumbai and New Delhi since Friday 12 April 2019, Jet Airways has now removed these routes from sale permanently.

These routes had been removed from sale until Friday 26 April 2019. However, this has now been extended indefinitely.

At present Jet Airways is only operating a very limited number of domestic flights. At most only a handful of Jet Airways flights are operating at any one time.

Jet Airways’ three daily London Heathrow slot pairs were leased from Etihad which took back the slots on Friday.

Taking account of these developments, short of a near miraculous injection of capital from a new investor, there is no reasonable prospect of Jet Airways returning to London Heathrow.

Jet Airways’ route to Mumbai was codeshared with Virgin Atlantic who also codeshared with the airline on a number of domestic routes in India. This does leave Virgin Atlantic without a codeshare partner in India. Virgin has mooted a return to Mumbai, a route it has previously suspended twice.

Virgin Atlantic is offering passengers who have booked codeshare flights on Jet Airways through Virgin a full refund, or the opportunity to rebook or reroute. Full details are on the Virgin Atlantic website.

Update: Jet Airways has now put flights from London Heathrow to Mumbai and New Delhi back on sale from Friday 26 April 2019. However, it remains far from certain that they will actually operate.

Update 2: Jet Airways has published a full list of cancellations. It states that its London routes are cancelled until Thursday 18 April 2019. However, again, it remains far from certain that they will actually operate.

Jet Airways Transfers Heathrow Slots To Etihad

Jet Airways has permanently transferred its Heathrow slots to Etihad Airways.

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Jet Airways has transferred its Heathrow slots to Etihad Airways.

Airport Coordination Ltd, which is responsible for governing slot trades at London Heathrow, has reported a permanent transfer of Jet Airways’ three daily slot pairs to Etihad. This follows significant disruption to Jet Airways’ operations and the recent cancellation of flights from London Heathrow.

Jet Airways - Etihad Heathrow Slot Swap — Jet Airways – Etihad Heathrow Slot Swap (Image Credit: Airport Coordination Limited)

It is likely that these slots were originally leased from Etihad to Jet Airways, after Etihad acquired slots from Jet Airways when it originally bought a stake in the airline.

The transfer officially takes effect from Sunday 28 April 2019. In the absence of any alternative arrangements this means that Jet Airways Heathrow operations will effectively end.

It is not clear at the moment what Etihad will do with the slots. Under “use it or lose it” rules Etihad will need to either lease the slots to another airline and operate them itself.

Jet Airways London Heathrow Cancellations

Jet Airways flights from London Heathrow are subject to cancellation.

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Jet Airways had been in financial distress for many months due to heavy financial losses and an over indebted balance sheet. Its domestic operations have been subject to signifiant disruption as aircraft have been grounded.

This has now extended to its international operations. Flights have already been operating without in-flight entertainment over the past week and some international routes outside of London have been cancelled.

Jet Airways flies from London Heathrow to New Delhi and Mumbai. The latter route is also codeshared with Virgin Atlantic.

All Jet Airways flights from London Heathrow are showing as cancelled on Friday 12, Saturday 13 and Sunday 14 April 2019:

Flight 9W119 London Heathrow – Mumbai
Flight 9W117 London Heathrow – Mumbai
Flight 9W121 London Heathrow – New Delhi

These flights have also been taken off sale from its website on Saturday 13 April 2019. Until Monday 15 April 2019, Jet Airways is expected to operate only a very limited number of domestic flights.

Jet Airways has provided limited disruption assistance advice on its website. Whilst it is promising full refunds to passengers, there is a long list of creditors, including its own pilots, who are owed money by the airline.

In anticipation of disruption Virgin Atlantic has confirmed that passengers who have booked to fly on Virgin Atlantic with onward connections to Jet Airways can either obtain a refund or rebook to an alternative date or destination. More details are available from Virgin Atlantic.

Whilst efforts are being made to find new investors in Jet Airways, this is clearly a fluid situation. Given the airline’s debts, widespread operational disruption and loss of confidence in the airline, it is hard to see what assets are left for any willing potential purchaser.

About Jet Airways

Jet Airways was founded in 1993 and was once India’s largest airline by market share. It began flying from London Heathrow in 2005 following a relaxation of a bilateral treaty which allowed more flights between the UK and India. Etihad acquired a 24% stake in the airline in 2013, and this is the latest in a truly disastrous string of investments by Etihad.

In the event of continued disruption it’s not clear what happens to Jet Airways’ Heathrow slots as Etihad did acquire three slot pairs from Jet Airways when it acquired a stake in the airline.

Update: Jet Airways’ Heathrow slots have been transferred to Etihad.

JetBlue To Launch London – Boston & New York JFK

JetBlue will fly from London to Boston & New York JFK from 2021 with the Airbus A321 LR aircraft, featuring its “Mint” premium cabin.

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Hudson River Park New York (Image Credit: London Air Travel)

JetBlue is to launch its first transatlantic routes from London to Boston and New York JFK from 2021.

Flights will be operated with Airbus A321 Long Range aircraft. JetBlue has converted 13 of its existing orders for Airbus A321 aircraft to the long range version.

It will feature an updated version of JetBlue’s signature “Mint” premium cabin which operates on select transcontinental routes in the US. JetBlue also promises to undercut existing premium transatlantic fares.

There is a lot JetBlue has not said in today’s announcement.

JetBlue has not specified which London airport it will fly from. It is highly likely that JetBlue will pursue hard access to Heathrow. It has been explicitly lobbying for slots at Heathrow to be made available as a condition of Air France-KLM, Delta and Virgin Atlantic combining their transatlantic joint-ventures. The American Airlines and British Airways transatlantic joint-venture is also under review by the Competitions & Markets Authority pending its renewal. From JetBlue’s press statements it is clearly targeting the major transatlantic joint-ventures and will be lobbying against these on both sides of the atlantic.

JetBlue has also not given any indications of potential schedules and frequencies. Though a fleet of 13 aircraft for transatlantic operations, some of which will ultimately operate from other European cities, should allow for a significant schedule.

Any new entrant should be welcomed. JetBlue has a lot going its favour. It haas a strong brand with a significant presence in Boston and New York. However, with a relatively small transatlantic operation and a small dedicated fleet, it will need to have sufficient contingency measures in place in the event of operational issues. Any short notice delays, cancellations and aircraft substitutions will result in goodwill being lost.

JetBlue’s announcement has been trailed long in advance and has not gone unnoticed by its competitors. Delta and Virgin Atlantic have already announced plans to fly from Gatwick to Boston and New York JFK in 2020. Should JetBlue ultimately choose to fly from Gatwick, it would be surprising if American Airlines and BA (which already flies from Gatwick to New York JFK) don’t make a similar competitive response.

JetBlue London Transatlantic Flights Infographic (Image Credit: JetBlue)

Virgin Atlantic Reports A Loss For 2018

Virgin Atlantic has reported a second consecutive annual loss for 2018.

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Virgin Atlantic aircraft at London Heathrow (Image Credit: Heathrow)

Virgin Atlantic has announced a second consecutive annual loss, having reported a loss before tax and exceptional items of £26.1m for 2018.

This follows a loss before tax and exceptional items of £49m for 2017.

Virgin expects to report a further loss this year, and to “broadly break even” in 2020 before returning to profit in 2021. Three years is of course a very long time in aviation.

In contrast, BA reported an operating profit of £1,952m and its parent company International Airlines Group reported an operating profit of €3,230m for 2018. By any measure this is a stark divergence in financial performance, even when accounting for the relative size of the two airlines.

BA of course benefits from its transatlantic joint-venture with American Airlines and signifiant cost and revenue synergies with fellow member airlines of International Airlines Group.

Virgin is taking a number of steps to turn around its financial performance.

It will replace its last remaining quad engine Airbus A340 and Boeing 747 aircraft with the Airbus A350-1000 from this year. Delta, which owns 49% of Virgin Atlantic, is to combine its transatlantic joint-venture with Virgin with its joint-venture with Air France-KLM. As part of this, Air France-KLM will acquire a 31% stake in Virgin and will explore broader co-operation beyond transatlantic routes.

Virgin is, after a period of focusing on North America, return to growth with the launch of Sao Paulo and Tel Aviv. The airline has also, through a consortium, acquired Flybe.

Key to the turn around of Virgin’s fortunes will be the need to work with Delta and Air France-KLM to create a strong rival to the American Airlines and British Airways joint-venture for both corporate customers and frequent flyers.

This is unlikely to escape the attention of American and BA which are likely to launch more new direct routes from London Heathrow and look at ground service improvements at Heathrow.

London Air Travel’s Atlantic Update – 10 April 2019

A weekly bulletin on transatlantic travel, published every Wednesday at 06:00 BST.

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Manhattan at Sunrise (Image Credit: London Air Travel)

Welcome to the The Atlantic Update for Wednesday 10 April 2019.

London – New York

The London – New York route has long been one of the most sought after and competitive long-haul traffic corridors in the world.

There is a long list of airlines that have come and gone from this route. And it is about to get even more competitive.

On Monday Virgin Atlantic unveiled the planned interiors for its Airbus A350-1000 aircraft. It will take delivery of the first four of the planned fleet of twelve Airbus A350-1000 aircraft this year and these are expected to first fly to New York JFK. Virgin has not yet specified which of its six daily flights from Heathrow to New York JFK will operate with the aircraft, but this will make Virgin significantly more competitive.

Virgin’s joint-venture Delta partner also plans to operate fully refurbished Boeing 767-400 aircraft on its twice daily flights from Heathrow to New York JFK from November of this year.

Staying with the Boeing 767, after a slow start United is now more a third of the way through retro-fitting its Boeing 767-300 fleet which ply London Heathrow – Newark. This should be completed next year, when United will also start refurbishing Boeing 767-400 aircraft. United should also open a new Polaris lounge at London Heathrow next year.

This will not escape the attention of American Airlines and BA for whom New York JFK is their most important transatlantic route. There has always been a relative disadvantage for AA and BA as they do not share terminals at London Heathrow. BA serves New York JFK from Heathrow with a mixture of 86 Club World seat Boeing 747s and four class Boeing 777-200 aircraft. Only the latter aircraft are to be fitted with the new Club Suite and if history is anything to go by, BA will try to get these aircraft on New York JFK first.

And if that wasn’t enough, JetBlue will make its transatlantic plans known later today.

United MileagePlus to adopt “dynamic pricing” of reward flights

United’s frequent flyer programme MileagePlus is not well known in the UK due to the lack of local Star Alliance partners.

However, it is reported to have followed Delta in introducing a change that is ultimately likely to make its way to frequent flyer programmes based in Europe.

It is reported to be introducing “dynamic pricing” of reward flights from November of this year. This means rather than pricing flights according to a set tariff based on distance specific flights will require different amounts of miles according to demand.

This has been mooted for the BA Executive Club and its timing is likely to be influenced by IT constraints more than anything else. The winners are likely to the “miles rich” members have more miles than they know what to do with, whereas the losers will be the “just about managing” who may have significantly less choice as to how they can use their miles.

Also of note this week:

Brightline / Virgin Trains USA has secured funding to expand its existing rail service from West Palm Beach to Orlando. It has also begun rebranding from Brightline to Virgin, with the rebranded station VirginMiamiCentral opening last week. (Virgin)

The Port Authority of New York & New Jersey has closed one of New York JFK’s four runways for resurfacing work. This is expected to be completed in November. (PANYNJ)

Virgin Atlantic Unveils New Upper Class Cabin

Virgin Atlantic has unveiled its new business class cabin which will debut on Airbus A350-1000 aircraft this year.

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Virgin Atlantic Upper Class Airbus A350 aircraft (Image Credit: Virgin Atlantic)

Virgin Atlantic has unveiled its new “Upper Class” business class cabin which will feature on its new Airbus A350-1000 aircraft.

This is the first major redesign of Virgin Atlantic’s business class cabin since it introduced the Upper Class Suite in 2003 with its reverse herringbone design.

Like the Upper Class Suite, all seats benefit from direct access to the aisle. However, that is where the similarity ends. This is a radically new design with forward facing seats in a 1-2-1 configuration. Whilst this has been adopted by many airlines one significant difference is that all seats face outwards towards the window, whereas on other airlines centre seats tend to face inwards.

The seat is 20″ wide and is 82″ long at its full length. This is 3″ longer than BA’s new Club Suite. All seats benefit from improved, albeit not complete, privacy as the seat has a sliding screen. There is also greater personal storage at shoulder level and a larger 18.5″ TV screen. Significantly for Virgin, it is no longer necessary to step out of the seat to “flip it over” from seat to bed mode.

There will be 44 Upper Class seats on the first Airbus A350s for London Heathrow. Like the existing BA Club World and Virgin Upper Class seats there are differences in configuration and style and much of these will be a personal preference.

Virgin also promises improved bedding and toiletries, with the added ability to pre-order pyjamas in your preferred size.

As is to expected from Virgin Atlantic the cabin features its signature colour scheme. A word of caution when judging the exact colour scheme from official press shots. Some early images provided to some outlets looked like they had slightly different colour schemes and whether intentionally or otherwise this looks to be the work of Adobe Photoshop’s auto processing tools!

The Upper Class bar is no more

Virgin Atlantic Upper Class Loft Area Airbus A350 aircraft (Image Credit: Virgin Atlantic)

One of the biggest changes is that Virgin has abandoned its signature Upper Class bar.

This will be replaced by an 8 seat lounge area dubbed “The Loft” at the entrance to the aircraft. This features a dedicated 32″ TV screen, with the ability to listen to its audio via bluetooth headphones, and a small stand-up work area.

Premium & Economy

Also on Virgin’s A350-1000 aircraft are new Premium (formerly premium economy) and economy cabins.

There will be 56 new Premium seats in a 2-4-2 configuration.

Passengers will benefit from a larger 11.4″ TV screen which can be controlled without the need to press against the screen.

In economy, there are 235 seats in 3-3-3 configuration. 36 of these seats will be “Economy Delight” seats with 34″ of legroom. As is to expected, all seats will have at seat power and USB charging ports.

In total there will be 335 seats (44-56-235) on Virgin’s Airbus A350-1000s at Heathrow. This compares to 331 (56-56-219) on BA’s Airbus A350-1000s.

Virgin Airbus A350 Routes

Virgin has said that its first Airbus A350s will fly to New York JFK from the summer.

This may focus BA’s mind when choosing which routes will operate with four class Boeing 777-200s retrofitted with the new Club Suite as these aircraft already operate on some flights to New York JFK. History has shown that new business class cabins can have a significant impact on market share.

London Air Travel’s Monday Briefing – 8 April 2019

Welcome to our weekly briefing on air travel in London and around the world, published every Monday at 06:00 BST.

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Virgin Atlantic Airbus A350-1000 aircraft (Image Credit: Virgin Atlantic)

Welcome to our Monday Briefing for the week beginning 8 April 2019.

Virgin Atlantic unveils new Upper Class Cabin today

Virgin Atlantic unveils its new Upper Class cabin today. The new seat will make its debut on the Airbus A350-1000 aircraft.

Virgin Atlantic CEO Shai Weiss has given a preview of the new cabin in yesterday’s Sunday Times.

The new cabin will feature all forward facing seats. The signature Upper Class bar will be replaced by an 8 seat lounge area, something Upper Class used to have in its early days.

From the supporting image the colour scheme looks very different, with a maroon seat coverings and fabrics. The use of a colour associated with control and being thoughtful, perhaps, reflects another step by Virgin to break from its “look at me” past.

Virgin is due to take delivery of 4 A350-1000 aircraft this year, with a further 8 aircraft to be delivered by 2021. These will operate at both Heathrow and Gatwick, with separate configurations for both airports.

Shai Weiss also indicates that Virgin is looking at further expansion, having already announced Sao Paulo and Tel Aviv. A return to Mumbai and Tokyo is under consideration, as is the launch of Beijing.

On a less positive note, Virgin is expected to report a financial loss for 2018. There will inevitably be comparisons between BA Club World and Virgin’s new Upper Class but, as Shai Weiss indicates, the real battle will be for corporate customers and frequent flyers through its expanded partnership with Air France-KLM. Given the stark difference in financial performance between BA and Virgin, this seems critical to turning around its fortunes.

Trouble at Jet Airways

Jet Airways has for many months been seeking new financing as it grapples with heavy losses and an indebted balance sheet.

It has defaulted on loan payments. Many creditors, as well as its pilots, have not been paid. This has resulted in many cancellations to domestic flights as aircraft have been grounded. Potential investors in the airline have been invited to make submissions of interest by tomorrow.

Whilst London Heathrow flights to Delhi and Mumbai have continued to operate as scheduled, it appears that these are now operating without any in-flight entertainment. This is presumably because licensors of content have not been paid.

The rules of airline PR (Part 1)

One of the many rules of airline PR is that airlines should only announce something, whether a new seat or route, when it is actually ready.

Partly this is out of expectations management, which is what any service provision is fundamentally about.

This is also so you don’t give your competitors too much advance notice. JetBlue’s planned launch of transatlantic flights to Europe which, if not announced on Wednesday will be the biggest damp squib in history, has been trailed for so long, Delta has already got a head start with planned flights from Gatwick to Boston and New York JFK next year.

The rules of airline PR (Part 2)

Another rule of airline PR is that when you mess up, you need to just say so and apologise.

Flybe produced a shopping list of excuses following a number of short notice cancellations last week. It has also confirmed that it will no longer base aircraft and crews at Cardiff and Doncaster from 1 October 2019. If the last weeks of BA Connect before it was absorbed into Flybe were anything to go by, matters may get worse before they get better. It is also likely to be some time before Virgin, which will be acutely aware of the early days of Virgin Trains, puts its brand name on Flybe aircraft.

New Istanbul Airport Opens

Istanbul’s new international airport has opened this weekend.

Turkish Airlines has successfully transferred its flights to the new airport, as has BA. The new international airport has acquired the code IST from Ataturk airport which will no longer be used for scheduled passenger traffic.

In case you missed it:

BA’s Geneva lounge is to close for refurbishment on Tuesday 28 May 2019. (London Air Travel)

Also of note this week:

Air Traffic Control delays in Europe are expected to get worse this summer. (Financial Times)

Monocle 24 continues its radio series on the “golden age” of aviation with a visit to the Museum of Flight and Teague Seattle. (Monocle 24)

Late Post Publication Updates:

After falling out of the Top 20 last year, BA makes a return to the Top 10 in the UK’s “Superbrands” survey for 2019 as the No 5 Consumer Superbrand and No 4 Business Superbrand. (Superbrands)

BA Geneva Lounge To Close For Refurbishment

The BA lounge at Geneva airport is to close for refurbishment on Tuesday 28 May 2019.

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British Airways Lounge, South Terminal, London Gatwick (Image Credit: British Airways) — British Airways Speedbird Logo (Image Credit: British Airways)

The British Airways lounge in Geneva airport will close for refurbishment on Tuesday 28 May 2019.

A new lounge will open later this year. In the interim, eligible passengers namely those travelling in Club Europe or Silver and Gold members of the Executive Club, will be able to use the Skyview Lounge. This is a third party lounge operated by dnata.

This lounge is located near to the existing BA lounge on the mezzanine level in the departures area. Passengers should turn right at the top of the escalator, and the Skyview Lounge is on the left hand side. Pictures of this lounge are on the Oneworld website.

Although no details have been given about the new BA lounge, it is likely to be in a similar format to recently refurbished lounges in Aberdeen and Rome.

The existing lounge in Geneva is largely based on the “Terraces” format which dates to the 1990s with shades of the “Galleries” format introduced ten years ago.

In terms of other BA lounge refurbishments this year, the new Club lounge at New York JFK Terminal 7 is due to open this year. The BA lounge in San Francisco is currently closed for refurbishment and will reopen in the summer. BA is also due to refurbish its lounges in Johannesburg this year. In the medium to longer term, other lounges earmarked for refurbishment include Chicago, Heathrow, Manchester and Miami.

Update Saturday 1 June 2019: The lounge refurbishment has been postponed. A confirmed closure date will be updated shortly.

Update Sunday 9 June 2019: The lounge will close for refurbishment on Monday 10 June 2019 and will reopen in late 2019.

Update Friday 22 November 2019: The newly refurbished lounge has now reopened.