Thread: Gatwick-2
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Old 6th May 2020, 01:33
  #835 (permalink)  
Skipness One Foxtrot
 
Join Date: Dec 2011
Location: London
Age: 39
Posts: 581
Originally Posted by Vokes55 View Post
BA cut the bulk of their LGW hub post 9/11 and let easyJet in to take over. They’ve been playing catch up ever since. They won’t make that mistake again.
I think you're re-writing history. BA changed their strategy at LGW by de-hubbing in the early 2000s.
They had never turned a profit and lost millions in the years since taking over Dan Air in their attempt to build a second complimentary London hub. Sadly it wasn't possible to maintain yields on the routes moved to LHR as they found the front cabins stayed too empty as that market remained at LHR, and worse, flew with their competitors. So all the European business connectivity was removed and BA downsized, allowing easyJet to gain a foothold. Without the high cost base of 2000AD BA, easyJet could turn a decent yield on European leisure routes, whereas BA couldn't even get close. It took another decade of slashing costs at BA to get their costs down to anything that could compete with EZY. Only then did BA LGW grow again, into sun markets mainly using ex BMI A319s and a ragtag fleet of second hand A320s.
The idea that BA should have stuck in there losing millions year in year out doesn't wash. The original rationale for BA LGW was replaced by a new business model which seems to have made them money, but crucially, BA have no need to dominate LGW. There was no ambition to be the dominant network carrier at the airport, much of BA's LGW operation is predicated on flying leisure routes where Exec Club frequent fliers can burn their AVIOS and make sure they fill the front cabins out of LHR in the next FY. They're not looking to catch up with easyJet, it's not that sort of competiton. If the LHR market collapses to some extent, and it will, BA may end up picking up even more slots and be able to maintain more of the LGW network out of LHR. All this talk of Vueling coming in sounds a lot like the hype of Norwegian coming building up a few years back. It wasn't a sustainable model.

I know the world is shrouded in negativity right now, but it will return to normal. Virgin have made it abundantly clear they’re keeping the Gatwick slots, BA won’t let any go and Norwegian will keep their entire set as long as they intend to keep the LGW base in 2021 (or earlier if demand picks up).
There's a new normal coming up, we've just seen a bubble go pop.
I'm sorry but anyone thinking that Virgin will be back at LGW in the next five years is likely mistaken, traffic is very cyclical, and we're on the rollercoaster down. They're closing the hangar and ClubHouse, it's game over. No Delta either come to that, that's not happening either. The focus over the next 2-3 years will be stabilising LHR, protecting market share and paying off debt. On that basis, any growth that can't be accomodated out of LHR that needs the costs of setting up a LGW station and ClubHouse, that's a medium term growth aim, not something we'll be seeing soon.
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