Welcome to the The Atlantic Update for Wednesday 23 January 2019, our weekly update on transatlantic travel from Europe to North America.
Groundhog Day
It is Groundhog Day on both sides of the Atlantic, with no end to the political impasse in sight.
The US Government Shutdown is now in its 32nd day. The Transport Security Administration continues to provide daily updates on airport security screening times.
Although this is very much seen as a domestic issue, there are impacts beyond the US. There is not a chance of imminent approval from the US Department Of Transportation for Aer Lingus joining the American / BA transatlantic joint-venture, nor for Air France-KLM, Delta and Virgin combining their transatlantic joint-ventures.
US East Coast & Chicago Weather
Severe weather conditions continues across the North East of the United States.
Travel waivers have been in place for the North East for some days. American Airlines and BA have last night extended these further to today. American, BA and United have also added waivers to Chicago due to expected severe weather.
Aer Lingus Airbus A320 aircraft (Image Credit: Aer Lingus)
Welcome to our Monday Briefing of the year for the week beginning 21 January 2019.
Flybe and Connect Airways
The more you read about the deal between Flybe and Connect Airways, the more you wonder if those in the consortium know what they have let themselves in for.
There was an unexpected twist last week when Flybe plc circumvented the requirement for shareholder approval for its sale by agreeing to sell the trading subsidiaries of Flybe plc to the consortium, leaving Flybe plc effectively a shell company.
Now one major Flybe shareholder, Hosking Partners, is threatening legal action to block the transaction, albeit legal proceedings have not yet been instigated. (Sky News)
Virgin has had its fingers burned before. In the late 1990s, Virgin acquired EuroBelgian Airlines to launch a new low cost airline, Virgin Express. A subsequent flotation was hugely unsuccessful and the airline merged with what was then SN Brussels, later to become Brussels Airlines.
Aeromexico’s “DNA Discounts”
By now you’ve no doubt seen the AeroMexico’s “DNA Discounts” ad where the airline dives head first into the US Border Wall debate.
Brands have normally adopted a conservative with a small c approach to geopolitical and social issues. However, Nike and Gillette have found that the amount of free social media coverage and distribution is a price worth paying for threats of a backlash and boycotts.
The agency behind AeroMexico’s ad is Ogilvy, who also work for BA. Would we ever see a similarly provocative ad from BA or Virgin on Brexit? Probably not. The safety net for AeroMexico is that the people mocked in the ad were unlikely to travel with the airline in any event.
Cathay Pacific “You Asked Us” Series
Cathay Pacific has launched a nicely animated “You Asked Us” video series.
This video covers Cathay Pacific’s fleet decisions, such as its preference to offer a higher frequency of five Boeing 777-300 flights on London Heathrow – Hong Kong, instead of operating three Airbus A380s carrying the same number of passengers.
Kuwait Airways Returns To Baker Street
One of the last vestiges of the pre internet travel era is the city centre airline ticket office.
In spite of high demand for commercial property and soaring prices, there are still a good number dotted around London.
On Baker Street, you’ll find offices for Air Algerie and China Eastern. Elsewhere, there’s Eva Air in Euston and Thai Airways in Mayfair. Many, such as Korean Air in Piccadilly, have closed.
An always busy Kuwait Airways office closed on Baker Street a couple of years ago and is now occupied by a boxing club. However, the airline is now due to return in a new unit across the street which is now being fitted out.
Who knows maybe one day an airline will follow Apple and Samsung and launch a fully fledged “experience” store on the high street.
Etihad Holidays At Paddington
Etihad Holidays is launching, to use marketing speak, an “activation” at Paddington station this week.
Designed to promote the new Etihad Holidays website, from Tuesday 22 to Wednesday 23 January, the “sci-fi, steampunk style” activation will feature Etihad’s “Holiday machine” with prizes, including a chance to win a free trip to Abu Dhabi.
The general rule with these type of events is it’s worth stopping by, if you have the time when passing through.
BA Airbus A319 aircraft at London Heathrow (Image Credit: British Airways)
British Airways has pretty much firmed up its schedule for the summer travel season, which officially starts on Sunday 31 March 2019.
Here are details of known schedule changes. Please note these are indicative and subject to change, particularly in the case of seasonal routes around the shoulder season.
Long-Haul Changes
BA will reinstate three former long-haul routes this summer:
Osaka, four times weekly from Sunday 31 March.
Pittsburgh, four times weekly, from Tuesday 2 April.
Islamabad, three times weekly from Sunday 2 June.
In terms of seasonal long-haul changes:
BA will fly to Charleston twice a week from Thursday 4 April until Thursday 24 October.
Calgary returns for summer from Sunday 31 March until Friday 25 October.
Muscat is suspended for the summer from Sunday 31 March until Wednesday 30 October.
In terms of long-haul frequency changes:
Nashville increases to daily from Monday 22 April.
Phoenix decreases from 10 flights a week to a daily service from Sunday 31 March.
New Short-Haul Route
Valencia transfers from Gatwick to Heathrow from Sunday 31 March.
Short-Haul Route Suspensions
Bilbao transfers to Gatwick from Sunday 31 March.
Milan Linate is suspended from Sunday 28 July to Saturday 26 October due to the closure of the airport.
Tallinn is suspended from Friday 29 March.
New Summer Seasonal Short-Haul Routes
Bastia once a week on Saturdays from 25 May to 28 September.
Preveza on Wednesdays and Sundays from Sunday 26 May to Sunday 28 September.
Ljubljana in Slovenia and Montpellier from Monday 15 July to Monday 2 September.
Seasonal Short-Haul Route Changes
Marrakech and Salzburg end for the winter on Saturday 30 March.
The following summer seasonal routes return this year:
Brindisi from Saturday 25 May to Saturday 5 October. Chania from Wednesday 22 May to Saturday 26 October. Corfu from Sunday 31 March to Saturday 26 October. Faro from Sunday 31 March to Saturday 26 October. Figari Sud-Corse Corsica, from Sunday 26 May to Sunday 29 September. Ibiza from Sunday 28 April to Saturday 28 October. Kalamata from Sunday 28 April to Sunday 29 September. Kefalonia from Tuesday 30 April to Saturday 28 September. Mykonos from Sunday 28 April to Saturday 26 October. Nantes from Thursday 11 July to Wednesday 4 September. Olbia from Saturday 18 May to Sunday 29 September. Palma from Sunday 31 March to Saturday 26 October. Palermo from Sunday 28 April to Sunday 29 September. Pula from Tuesday 21 May to Tuesday 24 September. Santorini from Sunday 28 April to Saturday 26 October. Split from Sunday 28 April to Friday 25 October. Zakynthos from Saturday 25 May to Saturday 28 September.
Note that operating dates and frequencies can change at short notice due to commercial demand.
Almeria will not return this year, having transferred to Gatwick.
Menorca will not return this year, and will operate exclusively at Gatwick.
Murcia will also not return as BA has not yet chosen to operate from the new airport in the region.
Short-Haul Frequency Changes
There are the usual modest frequency changes on long established routes. Particularly of note, and probably a sign of market dynamics, is that Manchester decreases by 14 flights a week, Glasgow decreases by 8 flights a week, and Aberdeen and Newcastle each decrease by 7 flights a week. Inverness however increases to 16 flights a week.
Helsinki also decreases to a daily service.
Larnaca increases to 2 to 3 times daily from Friday 12 July.
Pisa increases to 18 flights a week and also transfers from Terminal 5 to 3.
Alliance & Codeshare Partners
American Airlines launches a daily service to Phoenix from 31 March.
It is assumed that a codeshare with BA, which also flies to Alicante from Gatwick, will soon become available.
Vueling has not had a great time of late, with significant operational delays in the summer, partly due to periodic industrial action by Air Traffic Controllers in Marseille.
It has also had a slightly haphazard approach to the London market with routes spread across Gatwick, Heathrow and Luton with no coherent marketing message.
Vueling also flies from Gatwick to Barcelona, Bilbao, Florence, Paris Charles de Gaulle and Rome. It also serves Asturias on a summer seasonal basis and this route returns three times weekly from Tuesday 2 April 2019. From Heathrow, Vueling serves A Coruña and Barcelona, and from Luton it serves Amsterdam and Florence.
Vueling has recently acquired Flybe’s last remaining Gatwick slots. The times below don’t match the exact times of Flybe’s slots and more slots will be acquired from late October so it’s assumed further routes may follow. Continue reading “Vueling Launches Gatwick – Alicante”
Aer Lingus has today, Thursday 17 January 2019, unveiled its new brand identity and livery.
It was unveiled by its senior management team at a press conference at Dublin Airport. This is the first major brand identity and livery update for Aer Lingus in over 20 years.
Aer Lingus is naturally keen to emphasise its modernity and geographically advantageous hub in Dublin as a gateway between Europe and North America. And, with an obvious nod to the interminable political turmoil in the UK, Ireland’s place in Europe and attractiveness to inward investment.
The identity was designed by the branding agency Lippincott who have also worked for many other airlines including Delta, and Southwest Airlines.
Unsurprisingly, Aer Lingus stays true to its Irish roots with the use of green and the shamrock omnipresent on the tailfin, logo, wingtips and at the aircraft door.
The prominence of bright white on the aircraft fuselage, like relatively new liveries on fellow IAG airlines Iberia and LEVEL, is no accident. Activities such as painting aircraft and are now centralised in IAG, and there are obvious cost savings. Continue reading “Aer Lingus Launches New Brand Identity & Livery”
British Airways World Traveller Plus Meal (Image Credit: British Airways)
It’s almost 20 years since British Airways introduced its premium economy cabin, World Traveller Plus.
It has become increasingly popular in recent years, partly due to greater awareness, proactive upselling to economy passengers, and companies revising their corporate travel policies.
Whilst the cabin design has changed radically since its original inception (though you will still find the original seat on Boeing 747 and many Boeing 777-200 aircraft), the service itself has always been a slight variant of World Traveller economy.
Initially, partly due to cabin crew industrial relations, there was barely any difference. Over time, extra items such as pre-departure drinks, hot towels and a main course from the Club World menu have been added.
BA is this year launching an entirely new catering service with a dedicated menu for World Traveller Plus from February 2019.
In terms of the first meal service, the main changes appear to be largely presentational. There are new larger printed menus, a dedicated starter and dessert, all served on china.
The biggest, and most needed improvement, is to the second meal service. BA is now guaranteeing a hot option on all flights. This will be a snack on shorter flights and a meal on longer range flights. This will be welcome, particularly on shorter night flights, where the existing offering can be quite limited.
United Polaris Lounge Los Angeles (Image Credit: United Airlines)
Welcome to the The Atlantic Update for Wednesday 16 January 2019, our weekly update on transatlantic travel from Europe to North America, and our first edition for 2019.
US Government Shutdown
The UK and US Governments are currently rivalling each other for the greatest state of paralysis.
The US Government shutdown means that some 800,000 US Government employees are either not working or working without being paid. Delta has estimated it will cost it $25million in revenue in the first quarter of this year due to fewer Government employees travelling.
The shutdown has also delayed the entry of new aircraft into service by US airlines, including the Airbus A220 by Delta, as there has been no sign-off from the Federal Aviation Administration.
Transport Security Administration employees are required to continue working during the shutdown.
Some airports, most notably Atlanta, are experiencing significantly longer wait times.
United Opens Los Angeles Polaris Lounge
United has opened its latest Polaris lounge for international business travellers in Los Angeles.
This follows the template set by Polaris lounges in Houston, Newark and San Francisco with significantly improved seating, pre-flight dining and showers. A new Polaris lounge is due to open at some point at London Heathrow. (United)
The Talk Of The Town: The L-Train
Readers in the UK will be more than familiar with the concept of blanket shutdowns on the Tube and rail network for repairs and upgrades.
They are much less common in the US. The L-Train on the New York Subway which runs from 14th Street on Eighth Avenue in Manhattan under the East River to Brooklyn was due to close for 15 months from 27 April this year for repairs to the tunnel.
This has been pulled at the last minute due to a new plan by New York State Governor Andrew Cuomo, long a target for ire from weary Subway users, for a less disruptive approach with weekend closures. The official line from the MTA is that the shutdown has been suspended. However, according to the New York Times, this had been previously rejected by the MTA.
The Subway, owned by New York City, with the MTA controlled by New York State, has long been caught in City/State politics. Expect this to run and run.
Welcome to our first Monday Briefing of the year for the week beginning 14 January 2019.
Flybe & Joon
Two weeks into 2019 and two airline brands will at the very least start to disappear this year.
Air France-KLM confirmed that it is consulting with trade unions on folding its millennial brand Joon back into Air France.
Last Friday, the Connect Airways consortium compromising Cyrus Capital, Stobart Air and Virgin Atlantic have bid a mere £2.2m for Flybe.
For Virgin Atlantic, whose historical forays into the world of short-haul travel have been very brief, this is a small commitment of capital. However, it is going to be a big commitment of management time and its brand reputation when the main airline is still struggling to return to profitability. As the Flybe route network is reshaped to fit Virgin’s long-haul network, it is inevitable there will be some fall out.
The takeover itself is far from certain. Shortly after publication, according to Sky News, Flybe is expected to announce to the stock exchange that Andrew Tinkler has acquired a stake in the airline of approximately 10%. This could disrupt the consortium’s attempts to secure shareholder approval for the deal.
Apropos of nothing, Andrew Tinkler was unceremoniously sacked as Chief Executive of Stobart Group in June last year amid claim and counter-claim about misconduct and boardroom plots.
Disruption Advisory
Significant disruption is expected to flights departing from Frankfurt on Tuesday 14 January 2019 due to planned industrial action by security staff.
Industrial action is also taking place at Bremen, Dresden, Hamburg, Hanover and Leipzig/Halle.
24 hours have passed since the Connect Airways joint-venture between Cyrus Capital, Stobart Air and Virgin Atlantic has confirmed it is bidding to buy Flybe.
For Flybe’s shareholders, this is an absolute stinker of a deal, valuing their shares at just 1p. They duly responded by crashing the share price from 16.4p to 3.75p on Friday. For Flybe’s long-suffering employees, there is at least some certainty as to the future. The alternative would have been a fairly disorderly and undignified winding down of the airline.
In terms of what happens next, there are still a number of unknowns. However, the Ministry for Speculation and Guesswork has been consulted with the following thoughts:
1. The announcement was interesting for what it didn’t mention.
The announcement made much of the scope to grow short-haul connectivity to Virgin Atlantic and Delta’s long-haul flights and London Heathrow and Manchester.
Apart from Southend airport, which is owned by Stobart Group and Stobart Air operates a Flybe franchise, much less was said about other UK airports.
One airport that won’t feature in the consortium’s plans is Gatwick. Flybe announced on Friday that it has sold its last remaining slots to Vueling for £4.5m.
Nothing was also said about the impact on other Flybe franchise operators such as Blue Islands which flies from London City to Jersey, or Eastern Airways.
There are also other airports which, apart from routes to Virgin hubs and those of Virgin’s forthcoming transatlantic partner Air France-KLM, offer little to the consortium. A cursory scan of the departures board for many airports such as Exeter and Southampton shows that these airports would not be viable without Flybe’s operation. Any significant cuts to Flybe’s schedules at these airports will be politically sensitive.
2. This is high risk for the Virgin brand.
Although the new airline will be operated independently from Virgin Atlantic by a consortium, which is a challenge in itself, in the eyes of the public it will be Virgin Atlantic.
As much as Virgin will try to add a bit of fizz, regional short-haul flying is a painfully unglamorous business. As is the thankless task of feeding passengers to long-haul flights where there is a high risk of missed connections and mislaid baggage.
Virgin Atlantic will be the target of opprobrium for any service failings.
3. There are mixed results for BA and International Airlines Group.
Ultimately, if International Airlines Group wanted to buy Flybe it could have submitted a bid.
It is highly likely that IAG has its sights on bigger “transformational” deals. However, there are some downsides for BA and other IAG airlines.
There is now not a chance of the 12 Heathrow bmi remedy slots that BA has had to make available to Flybe ever returning to BA. The new airline will soon be able to make full use of these for short-haul services in perpetuity. It will also n doubt continue Flybe’s ambition to add more routes in the event of a third runway at Heathrow.
BA made a strategic decision over ten years ago to withdraw from regional short-haul flying. It has also shown no interest in franchising the brand in the UK, having withdrawn from all UK franchise agreements some years ago.
Indeed, much of Flybe today comprises the former “BA Connect” regional operation which BA effectively paid Flybe to take off its hands. BA also sold its 15% stake in the airline. When BA sold BA Connect, it turned its attention to BA CityFlyer at London City, which performs extremely well for the airline. Should Flybe downsize at London City, this will give more scope for BA CityFlyer to grow.
Flybe currently uses Avios as its frequent flyer currency. It is inevitable that Flybe will withdraw from the Avios scheme. This will reduce Avios coverage in UK regional markets. Passengers will be able to earn Virgin Flying Club miles. Virgin Atlantic is due to relaunch its frequent flyer programme this year. This, combined with earning and redemption opportunities on Air France-KLM, will make Virgin’s frequent flyer programme a much more competitive rival to the BA Executive Club.
Aer Lingus does rely on Flybe to operate codeshare routes from some UK regional airports such as Exeter and Southampton to Dublin, and these may well cease.
IAG CEO Willie Walsh will no doubt offer some “forthright” views on the merits of the deal when IAG announces its annual results next month.
A consortium including Virgin Atlantic has made an offer to buy the airline Flybe.
Flybe announced last year that it had put itself up for sale and Virgin Atlantic had made known its interest in the airline.
The consortium also includes Stobart Aviation, which operates flights under the Flybe franchise, and Cyrus Capital Partners. Stobart Group had launched an unsuccessful takeover bid for Flybe last year.
Cyrus Capital will be the single largest shareholder, owning 40% of the consortium. Stobart Aviation and Virgin Atlantic will each own 30% of the consortium.
The transaction is subject to approval by Flybe’s shareholders. In theory, another bid could be forthcoming. However, this is unlikely. Any bid by International Airlines Group would require competition remedies at London Heathrow and BA seems happy with the performance of BA CityFlyer at London City.
This bid offers little to Flybe’s shareholders. On its first day on the stock exchange in December 2010, Flybe’s share price closed at 341¼p, valuing the airline at £249m. Yesterday, Flybe shares closed at 16.4p, valuing the airline at £36m. This offer is for substantially less, at 1p a share, valuing the airline at £2.2m. However, it does provide for a relatively dignified and orderly exit.
As part of the transaction the consortium will also acquire Stobart Air. The combined Flybe and Stobart Air operation will operate under the Virgin Atlantic brand. However, it will remain an independent airline from Virgin Atlantic. Operating under the Virgin brand is not without risk if there are issues with reliability and punctuality.
The consortium has also agreed to provide a £20m bridge loan to support Flybe’s operations pending the acquisition and to invest £80m of further funding after the acquisition.
Stobart Air does provide wet leased aircraft to other airlines, including rivals of Virgin Atlantic, and this will continue to operate.
Full details of the offer can be found at Stobart Group.
Whilst the offer document makes much of the ability to feed Virgin Atlantic at London Heathrow and Manchester, and grow short-haul flights at London Southend, it says much less about operations at other UK regional airports which are heavily dependent on Flybe for traffic. Flybe is by some margin the single largest airline at many UK regional airports, including Exeter and Southampton. Continue reading “Virgin Atlantic Consortium Bids To Buy Flybe”
