Iberia is a distraction for BA as it struggles with fleet renewal plans and open skies.
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BA and EC consolidation
By IAG | May 1st, 2007 | Posted in british airways, heathrow, open skies | No CommentsOpen Skies – sort of
By IAG | March 22nd, 2007 | Posted in british airways, heathrow, open skies | No CommentsSo in the end the EC stood united and unanimously agreed to open skies – with a 5 month waiting period. The delay is at the request of the UK. This buys British Airways time to make radical changes.
It will need to move fast. The barbarians are moving fast too – "Continental Airlines applauded today's approval of an open skies agreement between the U.S. and the European Union which will provide Continental with flights access to London's Heathrow Airport for the first time. Upon news of the European Commission vote, Continental immediately filed an amended application at the U.S. Department of Transportation for rights to serve new routes to Europe once the open skies agreement takes effect." They want Houston-Heathrow service in 2008. Clearly Continental's team was working on this language a few days ago. Delta, US Airways and Northwest have not made any statements. Word is Delta is trading slots with Air France/KLM as is no doubt, Northwest. Its not clear where US Airways plans are.
We expect British Airways to rethink its fleet plans now. Does it weigh the replacement fleet with more frequencies (smaller planes) or bigger planes using its slots more efficiently? The former, smaller planes, means slot problems as these are finite, after all LHR has only so much concrete. While this is attractive, it is not something easily achieved. Which means they need to look at bigger planes to use the current slots more effectively. This means 747-8s or A380s.
It is more complex than it appears at first. BA wants to replace its 767s. These could be replaced by 777s, provide growth and still utilize the same slot capacity. Its 747s could be replaced by the larger 777s but not offer as much growth in capacity. Then there are routes that simply need big planes. The choices and trade offs are highly complex and very expensive. Mistakes have to be lived with a long time.
One has to wonder why a five month delay was requested? Was BA not preparing for open skies?
Open Skies – sort of
By IAG | March 22nd, 2007 | Posted in british airways, heathrow, open skies | 1 CommentSo in the end the EC stood united and unanimously agreed to open skies – with a 5 month waiting period. The delay is at the request of the UK. This buys British Airways time to make radical changes.
It will need to move fast. The barbarians are moving fast too – "Continental Airlines applauded today's approval of an open skies agreement between the U.S. and the European Union which will provide Continental with flights access to London's Heathrow Airport for the first time. Upon news of the European Commission vote, Continental immediately filed an amended application at the U.S. Department of Transportation for rights to serve new routes to Europe once the open skies agreement takes effect." They want Houston-Heathrow service in 2008. Clearly Continental's team was working on this language a few days ago. Delta, US Airways and Northwest have not made any statements. Word is Delta is trading slots with Air France/KLM as is no doubt, Northwest. Its not clear where US Airways plans are.
We expect British Airways to rethink its fleet plans now. Does it weigh the replacement fleet with more frequencies (smaller planes) or bigger planes using its slots more efficiently? The former, smaller planes, means slot problems as these are finite, after all LHR has only so much concrete. While this is attractive, it is not something easily achieved. Which means they need to look at bigger planes to use the current slots more effectively. This means 747-8s or A380s.
It is more complex than it appears at first. BA wants to replace its 767s. These could be replaced by 777s, provide growth and still utilize the same slot capacity. Its 747s could be replaced by the larger 777s but not offer as much growth in capacity. Then there are routes that simply need big planes. The choices and trade offs are highly complex and very expensive. Mistakes have to be lived with a long time.
One has to wonder why a five month delay was requested? Was BA not preparing for open skies?
Britain starts to play chicken with EC and Open Skies
By IAG | March 21st, 2007 | Posted in open skies | No CommentsA report just out from Reuters by way of Australia says the UK is now possibly going to block open skies. This after earlier reports they would cave and that Mr. Blair could not get Mr. Bush interested in the matter.
Of particular interest is the thought that Italy may join the UK in this effort because Alitalia would be threatened by the deal. It took the Italians a long time to wake up. The Greeks still seem to be asleep. Though these two airlines could make some good money selling slots to the (American) barbarians at the (Heathrow) gate. On the other hand we know what happened to Pan Am and TWA when they sold their Heathrow slots.
Britain starts to play chicken with EC and Open Skies
By IAG | March 21st, 2007 | Posted in open skies | No CommentsA report just out from Reuters by way of Australia says the UK is now possibly going to block open skies. This after earlier reports they would cave and that Mr. Blair could not get Mr. Bush interested in the matter.
Of particular interest is the thought that Italy may join the UK in this effort because Alitalia would be threatened by the deal. It took the Italians a long time to wake up. The Greeks still seem to be asleep. Though these two airlines could make some good money selling slots to the (American) barbarians at the (Heathrow) gate. On the other hand we know what happened to Pan Am and TWA when they sold their Heathrow slots.
Virgin eyes European cities for US service
By IAG | March 18th, 2007 | Posted in open skies | No CommentsThe Open Skies issue continues to make waves. "Virgin is exploring direct services to America from several European hubs," said a Virgin Atlantic spokesman. He said a study was under way that could see Virgin add flights to the United States from Paris, Frankfurt, Milan, Zurich, Amsterdam and possibly Madrid within two years, he said.
In other news, Prime Minister Tony Blair is likely to speak to U.S. President George Bush on Tuesday to urge the United States to commit to further liberalizing its aviation industry, the Sunday Times reported. This sounds like an amost direct request from BA.
The other Open Skies deal
By IAG | March 14th, 2007 | Posted in aviation, canada, open skies | No CommentsA deal between Canada and the US has been implemented to allow Canadian and U.S. airlines to pick up passengers and cargo in each other's country as long as the flight is continuing on to a third country. "What this means is that a Canadian airline can now fly, for example, from Toronto to New York, pick up passengers in New York and continue on to Amsterdam," Canadian Transport Minister Lawrence Cannon said.
Cabotage, allowing foreign airlines to ferry passengers between cities in the other country, has not been allowed for fear of undermining domestic service. Air Canada had planned to use the Open Skies deal to launch flights from Toronto to Los Angeles, continuing to Sydney, Australia.
This arrangement is likely to not amount to much. Canada is a small market – its population is about the same as California. It is therefore unlikely any US airline will fly through Canada and on to a third country. Canadian airlines (OK, Air Canada) might do so because of the far greater US market. You might see flights to Latin America going through Miami – maybe. The world has changed and non stop flights is the way the world is going. Its not clear how this agreement will impact the market – despite the politicians saying it will cut prices. The talk about more choice and lower fares seems just talk.
The other Open Skies deal
By IAG | March 14th, 2007 | Posted in aviation, canada, open skies | No CommentsA deal between Canada and the US has been implemented to allow Canadian and U.S. airlines to pick up passengers and cargo in each other's country as long as the flight is continuing on to a third country. "What this means is that a Canadian airline can now fly, for example, from Toronto to New York, pick up passengers in New York and continue on to Amsterdam," Canadian Transport Minister Lawrence Cannon said.
Cabotage, allowing foreign airlines to ferry passengers between cities in the other country, has not been allowed for fear of undermining domestic service. Air Canada had planned to use the Open Skies deal to launch flights from Toronto to Los Angeles, continuing to Sydney, Australia.
This arrangement is likely to not amount to much. Canada is a small market – its population is about the same as California. It is therefore unlikely any US airline will fly through Canada and on to a third country. Canadian airlines (OK, Air Canada) might do so because of the far greater US market. You might see flights to Latin America going through Miami – maybe. The world has changed and non stop flights is the way the world is going. Its not clear how this agreement will impact the market – despite the politicians saying it will cut prices. The talk about more choice and lower fares seems just talk.
Britain holds the Open Skies deal hostage
By IAG | March 7th, 2007 | Posted in EU, open skies | No CommentsFor the EU to accept the proposed Open Skies deal, every EU country gets an equal vote. Any country can veto the deal. Only one country looks likely to do this – the UK.
For some background, see this article. The UK's decision is being impacted by British Airways and Virgin Atlantic who do not want to see Heathrow opened up to new entrants.
This is of course no surprise. What is interesting is that up to now the US has been blamed for the lack of a deal. Foreign ownership rules of US airlines has been a big sticking point. But the US may have called the EU's bluff. By offering the deal, the US has exposed the EU position as flawed because the UK cannot or will not give up its lock on Heathrow.
The US could pile on a bit more by giving Virgin America its operating certificate to mollify Virgin Atlantic. That could work and expose British Airways as the sole holdout. Its funny how the deal was worked so far. Nobody we know of predicted this outcome. This is becoming a very interesting process. Provided it keeps moving forward of course. One has to wonder what British Airways wants to acquiesce.
Britain holds the Open Skies deal hostage
By IAG | March 7th, 2007 | Posted in EU, open skies | No CommentsFor the EU to accept the proposed Open Skies deal, every EU country gets an equal vote. Any country can veto the deal. Only one country looks likely to do this – the UK.
For some background, see this article. The UK's decision is being impacted by British Airways and Virgin Atlantic who do not want to see Heathrow opened up to new entrants.
This is of course no surprise. What is interesting is that up to now the US has been blamed for the lack of a deal. Foreign ownership rules of US airlines has been a big sticking point. But the US may have called the EU's bluff. By offering the deal, the US has exposed the EU position as flawed because the UK cannot or will not give up its lock on Heathrow.
The US could pile on a bit more by giving Virgin America its operating certificate to mollify Virgin Atlantic. That could work and expose British Airways as the sole holdout. Its funny how the deal was worked so far. Nobody we know of predicted this outcome. This is becoming a very interesting process. Provided it keeps moving forward of course. One has to wonder what British Airways wants to acquiesce.
