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Old 27th Oct 2008, 15:09
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Openskies

As you will have realized yourselves, we are facing very difficult times. With the worldwide
crisis in the financial markets, and the resulting global economic slowdown as major
countries move towards recession, the airline industry is suffering the worst crisis in its
history, compounded by the erratic nature of oil prices. (Although they are now falling
sharply, many carriers have hedged at higher levels). The crisis is deeper, more
protracted, more fundamental than 9/11, the Gulf War or any of the previous shocks that
have rocked our industry. All airlines are suffering – including the long established full
service airlines – and more than 30 airlines have gone bust this year.
OpenSkies and L’Avion are of course also impacted – the cities of New York, Paris and
Amsterdam that we serve are deeply affected by the financial and economic maelstrom.
Our revenues are below target through a combination of lower volumes and yields, and as
a priority we must take actions to ensure we keep within our cash reserves.
We must build on our strengths: we have people who care; we have a great product which
is exactly right for the market at this time; we have a single aircraft type which simplifies
our operation; we are small and can move quickly to respond to changing market
conditions. We must really maintain our focus.
We have decided to delay expansion: we will operate with our existing four aircraft and
defer delivery of the fifth aircraft (previously planned to enter operation in March 2009)
until the economic environment improves. We will also engage in a battle to reduce our
costs, examining each and every cost area for savings. We will look to all of you to help
us with these challenges – as well as continuing to do your job, and to make sure we
delight each and every customer.
It is imperative that OpenSkies and L’Avion act as one company so we are best placed to
get through these difficult times and achieve our shared vision of long-term success in the
point to point premium travel market. With immediate effect, we will use both company
logos and names in any external or internal communications. We will also act as one
company in commercial and financial decisions. In particular, we will have a two-way
codeshare between OpenSkies and L’Avion from 18 November, so we can sell tickets
under either the A0 or EC code from any of our distribution points on any of our four
aircraft.
Operational integration requires a decision on which Airline Operating Certificate (AOC)
we maintain as we become one single airline. We have now taken the decision to operate
under a single French AOC, after very detailed and careful organisational, commercial,
operational and cost analysis.

Paris was chosen for two major reasons:
- It is a strategic point on our network (at least half of our routes are likely to originate from
Paris)
- We can reduce cost and complexity and improve communications between managers
and operational employees by focusing our headquarters and European operations in
Paris.
The timing for full integration of our two great little airlines will be driven by a number of
factors and may proceed more rapidly in some areas than others, but will be completed
with determination as quickly and effectively as possible.


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Old 27th Oct 2008, 15:32
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after very detailed and careful organisational, commercial,
operational and cost analysis.
Will this be the same detailed and careful organisational. commercial, operational and cost analysis that has them rarely breaking double figures on the AMS and 30% load factors on the CDG?
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Old 27th Oct 2008, 15:35
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Good. I'd give it 6 months tops.
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Old 27th Oct 2008, 15:58
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Is this part of some cunning "Trojan Horse" plan ?

Sooner OS is dead the better, for all the industry's sake.
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Old 27th Oct 2008, 16:27
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We have now taken the decision to operate under a single French AOC...
... or they could have used BA mainline 757 crews who are currently being retrained onto other types rather than having to train their own. Maybe it's finally occurred to them that they can't escape the French social taxes after all. I give them until next summer.

Knucklehead.
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Old 27th Oct 2008, 16:48
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French Social Taxes......Excuse my ignorance but would EC have to pay this when the Cabin Crew are JFK based
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Old 27th Oct 2008, 17:34
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Yes one a/c type but both engine types.
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Old 27th Oct 2008, 17:51
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And how long ago was the L'Avion acquisition? Did Dale do any planning prior to that at all?
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Old 27th Oct 2008, 18:01
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It's a shame that when it does all come crashing down that the only one who will be safe job-wise is Knucklehead himself. Or maybe the BA board should get rid of him for wasting all that cash....
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Old 27th Oct 2008, 19:38
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has them rarely breaking double figures on the AMS
Excuse me, already flying out of AMS???
Oh yes, after searching the internet I see they fly the route since 15 october, but jeezz, what a bad marketing. Nobody around here (apart from the aviation community, and then still not many of those) has really heard about Open Skies.
How can you sell your tickets then?
I think you can safely blame marketing!
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Old 27th Oct 2008, 21:07
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I always suspected that the whole open skies thing was ill conceived, and fear now that this is the beginning of the end. Not very long now till its wholly divested to the French, with BA holding only a minority stake.
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Old 28th Oct 2008, 09:58
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Since when was OpenSkies supposed to make money? Can anyone else imagine starting a new business only airline with obselete aircraft in the current financial climate and expect it to be profitable?

The whole concept is to introduce new T&C's for pilots /cabin crew and a low cost management structure. It will take time, but gradually more and more aircraft and routes that BA Mainline could operate will go to OS. BA already has the spare aircraft, crew and product, so why mess about with OS?

British Airways are so desperate to make it work, they are putting tent cards advertising OpenSkies on the meal trays of its own Club World passengers out of North American stations. In other words BA taunts its own customers with the fact that they paid twice as much (or more) to fly BA with a proper flat bed, than OS.

What is not advertised is that the OS 757's do not have BA's AVOD entertainment system as weight is critical (especially in the winter).

Now Air France has put its tanks on BA's lawn by switching their B777 from LHR/LAX to JFK, arguably the world's most prestigious route. What is BA's response? An OS 757? What a joke.

Last edited by Poof in Boots; 28th Oct 2008 at 10:10.
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Old 28th Oct 2008, 11:31
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Clearly linked with the re-registering of the B757 on the new Isle of Man register as M-ERDE.


( with thanks to human factor )

Last edited by Skipness One Echo; 28th Oct 2008 at 18:27.
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Old 28th Oct 2008, 11:38
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The whole concept is to introduce new T&C's for pilots /cabin crew and a low cost management structure.
Quite. They should have started the routes using the full BA brand, which is the valuable asset in the BA business as a whole.

Instead, the whole exercise has been an avoidance of mainline Ts & Cs, which while understandable, should not have been the main driver behind the business proposition.
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Old 28th Oct 2008, 14:56
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British Airways are so desperate to make it work, they are putting tent cards advertising OpenSkies on the meal trays of its own Club World passengers out of North American stations.
... and there's a high probability that none of the Club World passengers will get to see the advertising cards.

French Social Taxes......Excuse my ignorance but would EC have to pay this when the Cabin Crew are JFK based.
I may be wrong but cabin crew aside, French AOC, French base and inevitably a number of French employees means a company having to pay French social taxes, which aren't cheap. I thought EZ was caught out with this...?
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Old 29th Oct 2008, 09:35
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There has got to be another explanation as to why the company is adopting a French Aoc and intends to be run as a French company. Anyone who has ever tried to start a business in France, or indeed had French employees knows that the costs are considerably more than in other European countries. Not only that, the employment laws are very much geared in favour of employees, and it is extremely expensive to get rid of staff if redundancies are required, so much so that it is easier and cheaper to cut back on non-French staff.

You simply don't go to France if you want to cut costs, so there must be another angle.
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Old 29th Oct 2008, 12:03
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Possibly preparing a sacrifice to allow a BA-AA deal to proceed
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Old 29th Oct 2008, 12:12
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Possibly preparing a sacrifice to allow a BA-AA deal to proceed
Now you have been thinking...and more than likely correct.
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Old 30th Oct 2008, 08:13
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"I dont believe it" - a Victor Meldrew Moment - for once I agree with 411a.
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Old 30th Oct 2008, 08:21
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Un-needed airline....enough transatlantic J/F capacity already, given the economic climate.

Open Skies will go to the wall rapidly with a French AOC, and pourquoi pas?

Sorry for the permanent employees, less so for the over-paid sub-contractors from TCX, FCA and the rest.
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