There’s about 50 FW’s off the Airbus. That’s almost 10% of the entire fleet. By contrast there’s only about 14 767 FO’s moving and let’s face it that’s not a real Freeze Waiver anyway as you alluded to. The recruitment team have already admitted that future recruitment - certainly in the near future - will be sourced entirely from cadets (primarily from L3 by the looks of it). They could very easily have filled the long haul slots this year with DEP’s from the pool instead of waiving freezes. They didn’t. That is a big indication that if the training capacity allows it, the trend toward freeze waivers will continue in 2019 and 2020 when they have new Long Haul aircraft arriving and retirements to replace.

Ah ok apologies I hadn’t studied the results that closely. I thought it was a smaller number than that but you’re right, 50 is significant.

As for the 767 waivers, those that have joined in the last few years are still engagement and equipment frozen so although the equipment is going, the engagement means that the company could have chosen to direct rather than grant aspirational bids. So to me it feels like a proper freeze waiver. No idea what the future recruitment plans are but maybe you’re right. Who knows.

Haha no worries. There’s not many as sad as me to study it that closely so it’s in your favour ;-)

Haha well I know the FW’s for those on the 76 have been extremely well received anyway!

The results came out while I was downroute so only glanced over it and noted a few Airbus FW’s in my frantic finger swiping down the pages to find my own bid result. Didn’t realise it was 50 or so.

Level is not a threat to BA? If the slots get used by Level rather than BA, surely that is already taking work away from BA? IAG will direct the work where they consider the highest profit expansion potential. If they believed LCLH cannot be successful, why would they bother to worry about Norwegian and present some kind of competition? BA did not see the likes of EasyJet as a threat in the early days and look what happened there? They clearly do not want to repeat the same mistake. I personally think there is now a sizeable market for low cost long haul. We are living in a world where people are always looking to do things as cheaply as possible because their employers are not giving them real payrises, and are unlikely to do so for another decade. The timing for previous LCLH was not right, but we are well and truly there now. I know far more people who just want to get from A to B as cheaply as possible, than people who want to pay a couple of hundred pounds more and have a better seat. You are looking at well over a grand saved for a typical family going away on holiday. That is a lot of money for the vast majority of holiday makers.

Rex, I really hope you are right and I’m wrong on this. IAG exists for one reason as far as I can see - allocate expansion opportunities via lowest unit cost and the ability to circumnavigate legacy industrial agreements in the process.

The future is interesting to say the least!

GS-Alpha the money to be made on Long Haul is in the Premium Cabins. Economy or Traveller or however you wish to brand the cheap seats is heavily subsidized by the Premium ones. Unit costs cannot be lowered to any significant degree to offset the huge loss in revenue by only selling cheap seats. Not only that but the low cost carriers cannot use the aircraft any more intensively than the legacies unlike short haul.

We know all this but it’s only to reinforce the fact that even when the economic environment (cheap fuel, low interest rates to finance new aircraft) is perfectly set up in theory to enable a LCC long haul operation, Norwegian are still only barely keeping their heads above water. What do you think will happen when another shock happens? (And it always does). I know who I’ll be betting my money on.

IAG are responding because Norwegian are taking revenue away, no doubt. Even if it is at the lower end of the market that’s still revenue that is not going into the coffers. Do you really think they’d sit and do nothing whilst that is going on? Ultimately though there is no way that they are going to cannibalize BA’s operation because the margins in LCC Long Haul are so thin and the profits are so limited.

We heard all the rumours about Vueling being the replacement for BA’s Short Haul operation at Gatwick. Still hasn’t happened. Won’t happen with Level either. I’ll say it again, they started Level because they got a fantastically low price for some end of line A330’s. That’s the only reason it works. And it’s perfect to hurt Norwegian in the short term.

Chaps/chapettes... for the uninitiated, what’s a freeze waiver?

I agree Rex, the best margins are to be made in premium seats, as long as you can put bums on seats without too many upgrades. I also agree that a return to very high oil prices would put a strain on low cost long haul travel margins. Holiday makers are not so keen on paying for premium seats though. The people buying these low cost seats were never going to buy premium seats from BA, so they are not directly taking revenue from BA. Level is tapping into a completely separate market, however any expansion of Level at LGW uses slots that could have been used by BA. IAG is about diversification without extreme interference with the BA brand, and Level helps to achieve that aim. Veuling did not arrive at LGW, but the threat was used to improve efficiencies there, which then filtered across to short haul at LHR. The same tactic could very easily be utilised against BA long haul, and that is bad for BA pilots whether or not Level survives in the long term. “Guys, we are going to use these new slots to expand Level unless efficiencies are made.” Sound familiar?

FCR

When you join BA you are given a 5 year “engagement freeze”. BA are not obliged to offer you a move onto another fleet until that initial 5 year period has expired. When you do get a move, say F/O 320 to F/O 777 you then have a 5 year “equipment freeze” applied. You can carry on moving fleets every 5 years if you so wish.

However you can bid to change fleet/go for command etc every year during the month long bidding window (July). BA will offer a “freeze waver” if there is a shortage on a fleet you have bid for that needs filling internally rather than via DEP recruitment.

This year due to various factors a large number of 320 F/Os are being granted moves to long haul fleets inside their initial 5 year freeze.
So clearly there will be a number of 320 vacancies, filled by FPPs and DEPs.

The advice is always “bid for what you want”. Some guys got 320’commands well inside their 5 year engagement freeze as a result. There are always some comedy bids, eg a year 1 cadet pilot bidding for an A380 command - that is streching the maxim somewhat!

Important for new joiners to remember that five years is not a reference to calendar years, it refers to training years. You only have to do part of a training year for it to be counted so what sounds like a long time is very often less. Of course then you still have to have the required seniority at the time for your chosen fleet.

Thanks for the info. Can’t fault his/her optimism!

So I think what we can take from this is that there will be recruitment, but as I said a page or two back, I’m not sure how many DEPs will get the nod. I refer back to the July holdpool update... ”At the moment based on our current forecasting for 2018 we are not expecting to be able to offer anyone a start date in 2018 from the DEP holdpool.”

And from what you say, freeze waivers from the 320 onto long haul fleets effectively closes the door for our non-rated swimming colleagues.

Difficult to say for certain but the indications are that the fact that so many Freeze Waivers are taking place off the Airbus - whilst we know for sure that there are at least as many DEP’s swimming in the pool who meet the LH requirements - means that the numbers have been crunched and it will have been concluded cheaper to get Cadets in on reduced pay for a number of years than it is paying for the one off cost of an extra conversion course.

Of course if the requirements jump to 200-300 a year again (we shall see) then the training capacity will determine the movement off the Airbus and the recruitment of DEP's. It will be interesting to see how it pans out.

No idea of the logic of putting Level in LGW.... why would you (IAG) use your low cost brand (Level) to take business away from your premium brand (BA)?

You end up just competing with yourself and lowering you overall revenues!

Having said that, I can still see it happening! :(

There is no logic Dave. It would absolutely trash the yields on those routes as you and I can see. Still people need something to be paranoid about I suppose! If it does happen they won’t be on the same routes as the BA fleet, it’ll be something different, so no threat to 777 jobs just yet.

To take out Norwegian then fold the Level operation is the only reason I can think of. Unless the strategic view is LCLH is the ways forwards and you don't want your business to be the next Polaroid. Evolve or die...

To be fair, the typical LCLH user will be very different to the typical business class user, one would expect operators would prefer a jet full of business class, as the highest incline stream, if there were enough users of such a service.

There’s undoubtedly less profit to be made in LCLH though VinRouge. You simply cannot get the unit cost down to the same extent that you can in Short Haul. It’s been tried over and over and over again. Norwegian haven’t somehow magically made it profitable, it’s the most advantageous environment there has ever been for LCCLH (Cheap Fuel, record low interest rates) and they are barely keeping their heads above water. Surely that tells its own story?

I am absolutely convinced that BA/IAG are talking up Norwegian as a stick to beat the workforce with. We should 100% call them on it.

BA/IAG has secured the LGW Monarch slots. Standby for mass recruitment.

Well it seems IAG have won the majority of Monarch’s Gatwick slots.

We are already increasing density down the back on our LGW 777s. Level wouldn’t work at Heathrow, but packing them in tight as you can has a market at Gatwick in my opinion.

IAG claim the customers buying tickets with Level are a completely new customer base. They are therefore not currently in direct competition with BA’s revenue stream other than the fact that expansion of Level is not expansion of BA. But you can say the same thing about all of the other companies within the IAG group.

Incidentally, I too think we should call IAG’s bluff with regards to their attempts to beat us with the threat of other companies taking our work. I thought that way back when they were claiming we needed to take cost cuts in order to fund BMI coming to BA, rather that Veuling or some new IAG entity. BA is definitely a hugely important part of IAG at least in the short to medium term.

Speculation aside as to where the slots are destined in the longer term, how do we think BA are going to service these new slots? Short haul aircraft, or long haul? Hang on to a couple of 747s and 767s a little while longer perhaps?