The attached may be useful background info. It's written by Steve Ridgway (Virgin Airways CEO), so not necessarily totally independent. However, the key data in his piece is a graph (from IATA) showing how premium traffic is suffering disproportionately in the current environment: a 19% drop in numbers but a 35% drop in revenue, suggesting very heavy discounting to get what premium passengers are out there.
He also makes a telling comment:
"However, it is highly likely that airline business models will need to change. If premium passengers don’t come back to the levels seen in 2007/8, and short-haul journeys are replaced by more rail traffic, then there will be widespread and more radical change in Europe."
I suspect BA's strategic thinking is not fundamentally different to the above. That's the background against which the current restructuring needs to be measured.
Full article (from FT's Alphaville blog) can be viewed at:
FT Alphaville » Blog Archive » Guest post: Steve Ridgway on the outlook for the airline industry