[/QUOTE]Manchester long haul - message from Nigel Turner, ceo
5 November 2008
Dear colleagues
In the extraordinary economic and trading climate that we are in today, it is even more important to ensure that we review the performance of the business to ensure that our assets and resources are utilised in the best way to deliver growth in passengers, revenues and profitability.
The Manchester long haul operation began in 2001 due to our inability to access the Heathrow-USA market. The UK Government had indicated in 2000 that they were prepared to agree a deal with the USA to open Heathrow gradually to competition, but lobbying by BA and Virgin at the last minute hoodwinked them into changing their minds, leaving us with only Manchester services to the USA for our aircraft.
Nevertheless, Chicago has generally been a success up to this year, when a combination of higher fuel prices, increased competition from both American Airlines in Manchester and some impact of additional capacity to the USA as a result of open skies at Heathrow has had a serious negative impact on the results. The reduction in seats due to the introduction of lie-flat beds in business class and a world leading premium economy cabin late last year has regretfully led to no significant increase to overall revenue, and we have been unable to generate an improved price for our much improved premium products in the Manchester market. Unfortunately it does seem that Manchester cannot deliver the levels of premium business that are available from the London market.
The disappointing revenue performance reflects our best-in-class product being more than offset by people being increasingly careful with money and downtrading. Equally it appears the Manchester long haul market has become significantly more price sensitive in the economy cabin with people buying purely on price.
The Caribbean and Las Vegas routes have always been difficult to see a long term future for. They are principally leisure routes, are operationally crew hungry and inefficient and have large seasonal fluctuations. Despite significant efforts to boost revenue and volume over the past year we have been unable to make any significant improvements and have insufficient high yielding premium passengers to make the service profitable.
In contrast, a number of our mid haul routes from Heathrow are performing very strongly and have clear potential for further growth in volumes and higher yielding business and premium passengers. We have therefore concluded that we should transfer the two A330 aircraft currently operating at Manchester to Heathrow in order to eliminate further expected losses from Manchester next year, but more importantly to give further impetus to our mid haul strategy at Heathrow. Cairo and Amman will be the routes upgraded to an A330 from next spring which will put them on a par with our principal competitors on the routes. In the current marketplace we do not consider it wise to be taking on any additional aircraft capacity and hence we have no alternative option if we are to develop the Heathrow mid haul routes further in the short term.
This redeployment of aircraft will obviously impact on operational staff based in Manchester and we are today commencing a 90 day consultation period with all union and staff groups affected, with a view to minimising the consequences. There will be additional jobs at Heathrow created as a result which Manchester staff will be able to take up if they wish. A small number of overseas jobs will also be impacted.
Communication to the trade and passengers will also commence today to ensure reaccommodation as required. Services to Chicago will cease on 15 January 2009 and to the Caribbean/Las Vegas in April 2009 after the peak Easter season has finished.
I am sure that like me, many of you will be disappointed to see these services end. The product delivered has been outstanding and I thank all of you who have been involved in making it happen. We do, however, have to make decisions that are in the best interests of the business and I am sure this is the right thing to do in the current circumstances.
Kind regards
Nigel Turner
chief executive officer[/QUOTE]
No surprises here this had to be the worst kept secret for ages, as all MAN crew have known this for over a week.
Am i surprised that its been a shambles ..........not at all.
Best of luck to all concerned at MAN crew, ground staff etc.