British Airways - 2
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I have been thinking about the route changes/reductions announced by BA a few days ago. I work in giving investment advice and the key rule there is diversification, don't put all your eggs in one basket. Put it another way, don't put all your bets on one horse in a race.
They seem to be slowly killing Gatwick, putting all bets on Lhr. Lhr is supposed to be the cash cow, yet it isn't at the minute. If it was so good, why are Ba in such a bad way? Not only have they bet on one airport, but they also heavily bet on first and business class. Both these sectors are in a bad way at the minute and Ba must suffer with them. There will be other times in the future when the same thing will happen, for different reasons. BA should be going after all three classes, as there will be times that the three classes will behave differently. Say first/business is down but economy stays strong.
The strategy that Ba are following defies logic, from the point of view of putting all bets on Lhr. I struggle to think of another major carrier with such reliance on just one airport. I find it difficult to believe the reasons as to why Ba could not make Lgw work. A lot of the failure was there own fault. For example, when I used to look at the paper timetables that were published, they would show say Gla to Jfk via Lgw/Lhr. But Lhr was always pushed first, it was as if Lgw was to be used only as a last resort. Lgw still has a hugh and well off catchment area as well as very good access to London. If part of the problem was high costs, then they should have sorted that out. If Ba had kept Go and made a major move on Lgw with Go, where would that be now? They might now be in a very commanding position there, like Easy now.
Over the past few years, Ba has done nothing but retrench. That can only go on for so long. Some day, they will discover, too late, that they have cut back too much and are left with very few options. I have to say, I fear for their long-term future.
True Blue
They seem to be slowly killing Gatwick, putting all bets on Lhr. Lhr is supposed to be the cash cow, yet it isn't at the minute. If it was so good, why are Ba in such a bad way? Not only have they bet on one airport, but they also heavily bet on first and business class. Both these sectors are in a bad way at the minute and Ba must suffer with them. There will be other times in the future when the same thing will happen, for different reasons. BA should be going after all three classes, as there will be times that the three classes will behave differently. Say first/business is down but economy stays strong.
The strategy that Ba are following defies logic, from the point of view of putting all bets on Lhr. I struggle to think of another major carrier with such reliance on just one airport. I find it difficult to believe the reasons as to why Ba could not make Lgw work. A lot of the failure was there own fault. For example, when I used to look at the paper timetables that were published, they would show say Gla to Jfk via Lgw/Lhr. But Lhr was always pushed first, it was as if Lgw was to be used only as a last resort. Lgw still has a hugh and well off catchment area as well as very good access to London. If part of the problem was high costs, then they should have sorted that out. If Ba had kept Go and made a major move on Lgw with Go, where would that be now? They might now be in a very commanding position there, like Easy now.
Over the past few years, Ba has done nothing but retrench. That can only go on for so long. Some day, they will discover, too late, that they have cut back too much and are left with very few options. I have to say, I fear for their long-term future.
True Blue
Over the past few years, Ba has done nothing but retrench. That can only go on for so long. Some day, they will discover, too late, that they have cut back too much and are left with very few options. I have to say, I fear for their long-term future.
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I work in giving investment advice and the key rule there is diversification, don't put all your eggs in one basket.
I might point out that BA made record profits last year..... The legacy carriers need to make money with a business model that delivers profits, for BA that has ALWAYS been operating at LHR. They've barely scratched a pittance outside of their main base and in lean times have lost millions.
Investment isn't aviation and in this particular case, the analogy is weak. People still get upset GO was sold, but it was eating away at BA's own margins at LHR and BA was competing with itself!
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"but it was eating away at BA's own margins at LHR and BA was competing with itself!"
Isn't this what the A318 operation from LCY will do?
Isn't this what the A318 operation from LCY will do?
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I like the idea of the LCY-JFK route, I'm not certain of the timing. The word is a bank has block booked a large amount of the seats, basically underwritten the route, and perhaps they have had a say in the date of commencement. That being the case - good luck, I hope it succeeds.
I cannot see why the success of a 32 seater aircraft from LCY should lead to the demise of a 291 seater aircraft from LHR. Taking the club/first cabin away from the equation and we still have 207 economy/premuim economy seats available on each jumbo. Is this another example of BA ignoring the none premium market - I hope not.
I cannot see why the success of a 32 seater aircraft from LCY should lead to the demise of a 291 seater aircraft from LHR. Taking the club/first cabin away from the equation and we still have 207 economy/premuim economy seats available on each jumbo. Is this another example of BA ignoring the none premium market - I hope not.
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"Skipness",
I think the "competing with yourself" argument is sometimes fallacious. For example, isn't this what VW does with Audi, Seat and Skoda (e.g., Golf vs. Leon, Polo vs. Ibiza/Fabia)? I maintain that the decision to sell Go was a strategic error of huge proportions.
If Go had remained part of BA the latter would probably now have a significant presence at Stansted, as well as at three other London airports.
The failure of BA's strategy is evident when one compares its relatively poor performance in terms of cpk/rpk growth when compared with, say, Air France (excluding KLM) or Lufthansa over the last twenty years or so. BA used to be Europe's largest airline in cpk/rpk terms; sadly, this is no longer the case.
BA has retreated to "fortress Heathrow" but there's nowhere to hide now that open skies has opened the airport to more competition. For a while T5 will have some appeal, but what when "Heathrow East" opens (not to mention the T4 "revamp")?
Post-script:
Rough "back of envelope" calculations of revenue passenger-km growth over period 1998-2008:
Air France (excluding KLM) +74%
Lufthansa +55%
BA +3 or 4%
[The data I have found seem to conflict; some would appear to show that BA shrunk in revenue passenger-km terms between 1998 an 2008, from roughly 125 billion to 116 billion.]
I think the "competing with yourself" argument is sometimes fallacious. For example, isn't this what VW does with Audi, Seat and Skoda (e.g., Golf vs. Leon, Polo vs. Ibiza/Fabia)? I maintain that the decision to sell Go was a strategic error of huge proportions.
If Go had remained part of BA the latter would probably now have a significant presence at Stansted, as well as at three other London airports.
The failure of BA's strategy is evident when one compares its relatively poor performance in terms of cpk/rpk growth when compared with, say, Air France (excluding KLM) or Lufthansa over the last twenty years or so. BA used to be Europe's largest airline in cpk/rpk terms; sadly, this is no longer the case.
BA has retreated to "fortress Heathrow" but there's nowhere to hide now that open skies has opened the airport to more competition. For a while T5 will have some appeal, but what when "Heathrow East" opens (not to mention the T4 "revamp")?
Post-script:
Rough "back of envelope" calculations of revenue passenger-km growth over period 1998-2008:
Air France (excluding KLM) +74%
Lufthansa +55%
BA +3 or 4%
[The data I have found seem to conflict; some would appear to show that BA shrunk in revenue passenger-km terms between 1998 an 2008, from roughly 125 billion to 116 billion.]
Last edited by Seat62K; 4th Jul 2009 at 17:19.
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BA Shorthaul
I have recently completed 4 sectors travelling from Edinburgh- Malaga via Heathrow, and return, all in ET. I must say I was completely satisfied with every aspect of my journey, perhaps with the exception of cajun chicken sandwiches at 8am on our outbound Malaga sector. It is breakfast time BA!
Our EDI-LHR sector was operated by a 9 day old Airbus A320 and a fantastic crew. Our LHR-AGP sector was operated by a 12 year old 757, inside it has seen better days, but from the outside, nothing wrong. Why spend money upgrading the interior of aircraft due to be grounded. And after all, it's a classic airliner, and it will be missed by both passengers and crew. Again the crews were superb, nothing at all was any trouble.
Inbound LHR was operated by a 6 month old A320, clean, comfortable, and yes, yet again, an attentitive, and extremely professional crew (no I don't work for BA, praise where praise is due). Same cajun sandwiches though.
The final sector, operated by a 1 year old A321, was the cream of the crop (minus those cajun sandwiches) The crew were an absolute tribute to BA, completely relaxed, not at all snooty, but still completely professional. These guys are what make us continue our loyalty to BA, and hope that whatever happens, they get through the current climate reasonably unscathed. I guess thats down to them up top, but to the guys at the core, thank you so much for over 24 years of happy (well mostly) flying, and keep up the fantastic work.
So, to those who say that BA don't give a monkey about their shorthaul product, it's not all true. Ive flown CE and ET and agree that something does need to change in the CE cabin, the service and peace of mind that you simply do not have with LCC's, I believe, is what makes it worthwhile, and in some cases, a more competitive ticket!
Our EDI-LHR sector was operated by a 9 day old Airbus A320 and a fantastic crew. Our LHR-AGP sector was operated by a 12 year old 757, inside it has seen better days, but from the outside, nothing wrong. Why spend money upgrading the interior of aircraft due to be grounded. And after all, it's a classic airliner, and it will be missed by both passengers and crew. Again the crews were superb, nothing at all was any trouble.
Inbound LHR was operated by a 6 month old A320, clean, comfortable, and yes, yet again, an attentitive, and extremely professional crew (no I don't work for BA, praise where praise is due). Same cajun sandwiches though.
The final sector, operated by a 1 year old A321, was the cream of the crop (minus those cajun sandwiches) The crew were an absolute tribute to BA, completely relaxed, not at all snooty, but still completely professional. These guys are what make us continue our loyalty to BA, and hope that whatever happens, they get through the current climate reasonably unscathed. I guess thats down to them up top, but to the guys at the core, thank you so much for over 24 years of happy (well mostly) flying, and keep up the fantastic work.
So, to those who say that BA don't give a monkey about their shorthaul product, it's not all true. Ive flown CE and ET and agree that something does need to change in the CE cabin, the service and peace of mind that you simply do not have with LCC's, I believe, is what makes it worthwhile, and in some cases, a more competitive ticket!
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If Go had remained part of BA the latter would probably now have a significant presence at Stansted, as well as at three other London airports.
What's the source of your numbers 62K, I want a look at the figures.
Remember loss making regional operations from Glasgow, Edinburgh, Manchester, Birmingam, Bristol, Cardiff, Newcastle and all would show up in the period of your figures when BRAL / Brymon was bought in house.Do the figures include the UK franchises such as GB Airways,Maersk UK and Loganair? These are all gone now.
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PC767 wrote:
There would still be 5 or 6 other BA flights daily on the LHR-JFK route. The loss of 1 would, in my opinion, have little negative impact overall. We already know that many premium seats ex-LHR are being filled by invol upgrades on non-premium fares. The LCY-JFK will only have premium fares, so no dilution of revenue there. Also bear in mind that the LCY service is crewed by LGW based CC (and only 3 of them at that) who (currently) are more cost-effective than LHR counterparts. If an LHR-JFK is cancelled that aircraft and slots are released for use on a possibly more profitable route. IF the LCY route IS being underwritten, then I'd say it's a good thing to operate it in preference to one of multiple, probably loss-making LHR-JFKs.
When I worked in the terminals at LHR, we often talked of the possibility of an all-premium service, to really set ourselves apart from the competition. The problem with a mix of premium and non-premium (plus everything else inbetween) on one aircraft is that it can result in a delay to caused by a low revenue customer noshowing at the gate, resulting in 70+ premium customers being inconvenienced by 1 £99 (or whatever) customer. LCY will avoid this.
I cannot see why the success of a 32 seater aircraft from LCY should lead to the demise of a 291 seater aircraft from LHR.
When I worked in the terminals at LHR, we often talked of the possibility of an all-premium service, to really set ourselves apart from the competition. The problem with a mix of premium and non-premium (plus everything else inbetween) on one aircraft is that it can result in a delay to caused by a low revenue customer noshowing at the gate, resulting in 70+ premium customers being inconvenienced by 1 £99 (or whatever) customer. LCY will avoid this.
Last edited by TorC; 4th Jul 2009 at 18:20. Reason: more words
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Whilst I hope the new LCY JFK route is a success I would just remind people that the premium Open Skies product was considered to be the way ahead for BA. It has recently been stated that this operation is not a success. I truely wonder if 2 x 32 sales are really going to make any difference to the global bottom line. A lot of management time for very little revenue gain?
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I'm sure I heard on this thread or another (maybe LCY) that they are selling way above expectations and are in serious demand by the companies in London and New York? Or was I just dreaming that?
Also, found November fares available at a very reasonable £2804.80 return inc. all t&cs.
Also, found November fares available at a very reasonable £2804.80 return inc. all t&cs.
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"Skipness",
I was in a bit of a hurry yesterday, hence the "back of envelope" comment. Today I have been able to look more closely at the data.
The 1998 data below come from "Airline Business" (via flightglobal.com), whilst those for 2008 come from IATA's "World Air Transport Statistics", 53rd edition.
Change in passenger-kms 1998-2008:
British Airways -8.1%
Air France (excluding KLM) +76.9%
Lufthansa +75.6%
[BA 125,951 to 115,734; Air France 74,542 to 131,845; Lufthansa 71,897 to 126,267 - all figures millions.]
I found BA's relative decline shocking and wondered initially if perhaps the data for the two years lack comparability. For 1998 they are for "revenue passenger-kms" and for 2008 "scheduled passenger-kms flown". I assume the 1998 data exclude those flying for "free" (such as airline staff and those redeeming frequent flyer miles) whilst the 2008 data exclude charter operations but otherwise seem to measure the same thing. Does anyone have greater methodological insight than I?
I have not looked at other years; presumably the picture would be different had I done so. I think 1998 may have been a particularly good year for BA. In that year it was fourth in the world in passenger-km terms, behind United, American and Delta.
Whichever way you look at it, BA has been in decline for years whilst comparable European carriers have been growing. I think that to some extent this was due to the way BA responded to its view that Heathrow was its core and the perception that Heathrow could not accommodate growth (even with T5, BA will need to use T3). The aim, it seems to me, was to increase the proportion of longhaul "premium" seats at the expense of economy (look at how few Traveler seats there are in a four-class 777, for example).
The current collapse of "premium" travel has left BA scrambling to attract economy class travellers but, if what I read is true, overbooking and the lack of World Traveller seats has led to an unusually large number of involuntary upgrades.
I was in a bit of a hurry yesterday, hence the "back of envelope" comment. Today I have been able to look more closely at the data.
The 1998 data below come from "Airline Business" (via flightglobal.com), whilst those for 2008 come from IATA's "World Air Transport Statistics", 53rd edition.
Change in passenger-kms 1998-2008:
British Airways -8.1%
Air France (excluding KLM) +76.9%
Lufthansa +75.6%
[BA 125,951 to 115,734; Air France 74,542 to 131,845; Lufthansa 71,897 to 126,267 - all figures millions.]
I found BA's relative decline shocking and wondered initially if perhaps the data for the two years lack comparability. For 1998 they are for "revenue passenger-kms" and for 2008 "scheduled passenger-kms flown". I assume the 1998 data exclude those flying for "free" (such as airline staff and those redeeming frequent flyer miles) whilst the 2008 data exclude charter operations but otherwise seem to measure the same thing. Does anyone have greater methodological insight than I?
I have not looked at other years; presumably the picture would be different had I done so. I think 1998 may have been a particularly good year for BA. In that year it was fourth in the world in passenger-km terms, behind United, American and Delta.
Whichever way you look at it, BA has been in decline for years whilst comparable European carriers have been growing. I think that to some extent this was due to the way BA responded to its view that Heathrow was its core and the perception that Heathrow could not accommodate growth (even with T5, BA will need to use T3). The aim, it seems to me, was to increase the proportion of longhaul "premium" seats at the expense of economy (look at how few Traveler seats there are in a four-class 777, for example).
The current collapse of "premium" travel has left BA scrambling to attract economy class travellers but, if what I read is true, overbooking and the lack of World Traveller seats has led to an unusually large number of involuntary upgrades.
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Thank you MUFC fan for that data.
It illustrates my point, BA needs about stg 24 Million of revenue per day to achieve its past financial stability. This operation ex LCY assuming a 80% load factor and a round trip fare of circa stg 3K is going to raise stg 150K per day.
Thats only about .6% of the daily revenue the airline needs. WW is not crying wolf but is his strategy right??
It illustrates my point, BA needs about stg 24 Million of revenue per day to achieve its past financial stability. This operation ex LCY assuming a 80% load factor and a round trip fare of circa stg 3K is going to raise stg 150K per day.
Thats only about .6% of the daily revenue the airline needs. WW is not crying wolf but is his strategy right??
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BA1402 LHR-MAN A321
SDT: 18:00
ADT: 18:32
SAT: 19:05
AAT: 18:59
27 minutes?! From LHR to MAN?!
Is this usual?! I have done BLK-STN in that time on a weekday but BLK is straight out etc. but is this normal for a BA shuttle flight? Only at the weekend?
SDT: 18:00
ADT: 18:32
SAT: 19:05
AAT: 18:59
27 minutes?! From LHR to MAN?!
Is this usual?! I have done BLK-STN in that time on a weekday but BLK is straight out etc. but is this normal for a BA shuttle flight? Only at the weekend?
Quite possible. I did LHR-LBA in a British Midland DC9 some years ago in 26 minutes block time, 22 minutes flight time on a Saturday evening. I guess the same is still possible nowadays at the right time of day.