Posted by Seth on August 2, 2008 under Uncategorized | 
The BA subsidiary OpenSkies announced last week that they will launch their second route, New York – Amsterdam on October 15, 2008. And they’ll be doing so with 18 fewer seats on their planes. When they launched their service earlier this year they had Business, Premium Economy and Economy seating. They’ve decided that the demand for the Premium Economy product is high enough that they will be pulling out the regular Economy seats and replacing them with more Premium seats.
So apparently now the all premium cabin airline is back again, this time with two classes of service that are both premium, just one more premium than the other.
Also, this move means that OpenSkies will be operating from both of the main European hubs for the Air France/KLM conglomerate. I guess it is payback for Air France going after the London – Los Angeles route.
Posted by Seth on July 2, 2008 under Uncategorized |
And then there were none.
After a flurry of all-business transatlantic airlines sprouted up over the past few years the last surviving member of the group, L’Avion, has agreed to a buyout from British Airways. The operational assets, including planes and airport slots from L’Avion will be merged into the OpenSkies subsidiary. This effectively gets OpenSkies a strong toe-hold at Paris’s Orly airport and adds a couple more 757s to the fleet. It should allow for additional growth of the OpenSkies route map as planned and previously announced.
I’m reasonable certain that the planes will switch to the OpenSkies config of Business, Premium Economy and Economy, which should also help them remain solvent, something the all-Biz carriers couldn’t do.
Posted by Seth on June 20, 2008 under Uncategorized |
I’ve posted about the new BA subsidiary OpenSkies previously. They’re looking to start flights from a number of European cities to New York to take advantage of the recent Open Skies treaty. They launched their service this week with their JFK-Paris Orly route.
And now they’re looking to boost bookings on the flights, offering 2-4-1 deals for travel this summer in the Business and Premium Economy cabins. You have to book using a special code available from this page. Both passengers have to be on the same flights, the free ticket still has to pay $100+ in taxes/fees and the free seat doesn’t earn points, but it is still a nice way to sample the new product a little cheaper than otherwise.
Happy flying.
Posted by Seth on May 20, 2008 under Uncategorized |
OpenSkies, the British Airways subsidiary focusing on non-UK flights from the USA has received approval from the US Department of Transportation to begin selling tickets on their planned flights between New York’s JFK airport and Paris’s Orly. They also reiterated their plans to add Brussels and Milan, Amsterdam and Frankfurt to their portfolio as they grow out their routes.
OpenSkies/BA is the first carrier to go after the recent Open Skies treaty negotiated between the US and EU. All the other new traffic has been destined to London’s Heathrow from US-based carriers. And while I get that some people see Heathrow as a “premier” airport for connections and/or travel to London, I don’t see the value in adding another 2000 daily seats there, which is basically what has happened. There are a ton of other cities that can benefit from service and connections, and OpenSkies seems to be the only carrier making a go of it. They’ve also established a code-share agreement with L’Avion, a French all-business class carrier in order to obtain the slots at Paris’s Orly airport. So it looks like they really are moving forward, despite the threat of strikes from BA’s pilot’s union over the new group operating on a different contract and pay scale.
Time will tell, but things are continuing to move forward, despite the threat of strikes and record fuel prices. The folks at BA must really think they’ve got it figured out with this plan.
Posted by Seth on March 30, 2008 under News |
The first flights operating under the recently negotiated Open Skies treaty between the EEC and the United States landed in England this morning, including a Continental 777-200 from Newark, the first flight to land under the agreement.
Many observers are predicting that the agreement will result in a ton of new flights being offered by a lot of different carriers. But since the treaty was signed only one route has been announced, other than flights to London’s Heathrow. American carriers – including US Air, Continental and Northwest – along with British Airways and Air France have all announced additional service for Heathrow to the USA. In addition, BA has announced the launch of their new subsidiary, OpenSkies, to fly from Paris to New York. So this revolutionary new treaty has resulted in basically a flooding of one airport with new service. Yeah, Heathrow is the center of the travel universe, even more so than New York’s JFK or Tokyo’s Narita, but I still am waiting to see more benefits from this treaty other than more flights to London. And considering how much the US-based airlines are paying for the slots at Heathrow (CO reportedly paid $209MM for their 4 pairs), it is hard to believe that they can really drive profit from the slots; it’ll take a LOT of paid traffic in the pointy end of the plane to make up that much of an investment.
On the plus side, this should make things super-cheap for folks in London to fly over to the USA and take advantage of the incredibly weak dollar, though they still have to pay GBP40-80 in departure taxes (~$80-160) at a minimum, the flights are just not cheap no matter what.
Tags: Air France, American Airlines, Boeing, British Airways, Continental, London, New York, NorthWest, OpenSkies, Paris, US Air
Posted by Seth on February 21, 2008 under Uncategorized |
OpenSkies, the British Airways subsidiary focused on connecting mostly premium passengers between non-London markets and the USA has announced that their first market will be Paris – New York. They’ve applied for the appropriate route authorities, which should pretty much be a rubber stamp at this point, hasn’t decided which Paris airport to use and will use JFK in New York.
Like many things in life, however, this is subject to change, particularly since the BA pilots are threatening to strike over the plans to staff the subsidiary with lower paid crews than regular BA flights. While they may just be idle threats for now, the union has voted overwhelmingly in favor of authorizing the strike, though no date has been set. BA challenges the union’s stance, suggesting that a few hundred new pilot positions will be opening up in the London bases of the carrier, though that seems to be insufficient to assuage the pilots anger at this point. Good times.
Posted by Seth on February 16, 2008 under Uncategorized |
Recently Europe opened up to an Open Skies (unlimited flights between any destinations) agreement with the USA. Now Australia has signed on as well. Prior to this agreement non-stop flights from the mainland US to Oz were limited in frequencies, destinations (LAX/SFO only on the USA side) and there were some controls on pricing. All that goes away with this agreement. Any carrier based in the USA or Australia can operate any flight to any airport between the two countries. This is going to be a big hit on Qantas’s operations, as they currently operate ~77% of the capacity between the two countries (United has the rest), and they do so at a significant premium over their other main longhaul route (Oz-London). The airline most likely to benefit in the immediate future is Virgin Blue, the Richard Branson operation down under. They’ve got the planes on the way and he’s got some experience taking on a major flag carrier on their money routes and winning. With all the recent news in the US travel market being about the potential mergers and the associated reductions in service levels that are likely to follow, this improvement is a nice one to see come to fruition.
Update: On further study this agreement is only semi-open. Perhaps “Ajar Skies” is a better description. The main limitation here is that the carrier has to be US or OZ-based, while regular open skies allows any carriers. This was done to prevent Singapore Air and Air Canada – two carriers that actually want to fly the routes – from competing. No US-based carrier has expressed any interest in starting the route in the immediate future, though Continental and Delta rumors are starting to swirl.
Posted by Seth on January 22, 2008 under Uncategorized |
Following the demise of MAXJet back at Christmas, there was a bit of conjecture about how the reduction of capacity in the market would actually be good for the other airlines in the space (SilverJet, EOS and L’Avion are the big three right now). Despite pundits claiming for months that these upstarts were going to take a bite out of the legacies (mostly American Airlines and British Airways, and Air France to a lesser extent), the legacies are still flying just fine on the routes, and British Airways has announced what seems to be a reasonable approach to the competition, OpenSkies, which will be mostly premium seats with a few coach seats, just in case. So the legacies are keeping their share of the market and responding appropriately, but the upstarts are still ok. Or are they.
Jarad Blank seems to think the answer is no, and he’s got some pretty impressive numbers to back up his reasoning. Basically, EOS has a burn rate of ~$50MM annually and they are likely going to struggle to decrease that number before they run out of money in their current funding cycle. They may find another cash infusion, but it doesn’t look promising.
It will be sad to see the premium carriers fall. That being said, I’m not likely to ever pay that much for a plane ticket, so I’d just be holding out for reward travel to show up, just like I was saving for a trip on the Concorde years ago. So I guess my vote doesn’t really count.
Posted by Seth on January 10, 2008 under Uncategorized |
Following on the negotiation of an “open skies” agreement between the USA and the EU, allowing any carrier from either side of the pond to fly to any destination on the other side, British Airways has announced their intentions to launch a new carrier/subsidy in early 2008. The new carrier will be named – somewhat appropriately and somewhat stupidly – OpenSkies, and will provide service between New York City and either Brussels, Belgium or Paris, France. They haven’t indicated which airport in the NYC area they’ll use (JFK or Newark), nor if Brussels or Paris will actually be first, though they expect to have both in service by late 2008.
They’re going to fly with a smaller plane (757) than many carriers use on transatlantic (TATL) flights, but they are also only going to have 82 seats on the plane. Of the 82, 30 will be coach seats and the other 52 will be split between business class and premium economy (24/28). This cabin configuration is a new one in the TATL market but very similar to what United offers in their p.s.-configured planes for transcontinental service within the USA. The cost of flying the plane across the pond remains pretty constant independent of the number of seats, so this means that OpenSkies/BA will need to drive a certain amount of revenue premium with the Business and Premium Economy seats in order to have a profitable service.
OpenSkies will also find themselves competing directly with a number of established US- and EU-based carriers on the routes they’re going after, and without the ability to offer convenient connections on either end, so they’re only going after point-to-point traffic, making their job even harder. On the plus side, they’ll have the marketing and frequent flyer programs of their parent company, BA, on their side to help drive the business.
The all-premium class TATL market is still trying to break out, with one carrier having already failed. OpenSkies will get to benefit from fuel hedges of BA, which will help, and they’ll have a few different price points to sell seats at, which should also help, but there are still no real guarantees (there never are).
I’m all in favor of more competition, as it usually means lower fares and I like that a lot. I just don’t know if they’ll be able to actually make a go of it long term.
Posted by Seth on December 19, 2007 under News |
It is no secret that air travel in the northeastern part of the USA is a nightmare. Between weather delays, limited capacity airports with zero room to grow, local residents with a lot of money and lobbying clout and some of the most densely packed airspace anywhere in the world, flight delays and cancellations have become the norm rather than the exception. I’ve blogged about it before and clearly something had to give. Well, today that happened.
The US Department of Transportation has indicated that they are going to implement limits at JFK to better space the air traffic in and around the NYC area. Also known as slot controls, the rules effectively limit carriers from just deciding to show up at the airport and ask for a landing slot when they get there (it doesn’t really work that way, but it is pretty close). Instead, all the airlines will have to get their schedules approved to ensure that the number of flights in any given hour is limited to 82-83. Since that is pretty much the maximum that the airprt can handle the fact that there are > 100 in some hours these days is a sure-fire way to delays. Even worse, the airlines blame the delays on “Air Traffic Control” rather than themselves (as though somehow the ATC folks are supposed to bend the rules of space and time to make more planes land on a runway than is physically possible), so the airlines aren’t liable for accommodating passengers who misconnect. This ends up pretty messy for passengers rather often.
The problem with slot controls is that it presents a huge barrier to entry for airlines that want to establish new service. Buying landing slots isn’t cheap. Some other major airports with slot controls/limits include Tokyo’s Nartia (NRT) and London’s Heathrow (LHR). With the recent Open Skies treaty many carriers are working to secure slots at LHR, with the price reportedly surpassing $10MM. That’s a huge investment to make, especially considering that most carriers fly to a place more than once a day. Effectively the slot controls are a mint for the existing carriers, as they can sell their slots to the highest bidder if they want (and think they’d make more money that way than via actually operating flights). Indeed, BMed (now owned by bmi) has been operating “ghost flights” for some time in and out of LHR to ensure that they get to keep the slots at LHR, waiting for the Open Skies thing to happen so they can sell them for big money or actually operate flights and make money that way.
Of course, LaGuardia has been slot controlled for a while now – since shortly after the summer of hell in 2001 when it and Chicago’s O’Hare were responsible for something like 40% of all delays nationwide. And some effort is being put in to making sure that the airlines don’t all just move their problems across New York harbor to Newark airport, since there are already plenty of problems there, too.
So now Lufthansa has bought ~19% of JetBlue, one of the largest carriers at JFK. And they own a sizable stake in bmi, the second largest slot-holder at LHR. They could conceivably cause a lot of trouble in the trans-Atlantic market if they saw fit. Or just make a lot of money doing so.
Things are going to remain bad for a while until real change comes about in the FAA’s navigation and air traffic routing plans, but hopefully this will help prevent carriers from pretending that they can actually operate the schedules that they’re selling the public on, especially when they know full well that they have no chance of actually getting the job done.
