If the primary differentiator for most pax is price, then why would BA close down its ops at LGW and move them to LHR thus increasing operating costs and eroding margin?
BA need seats filled once the recovery starts, so surely it would make sense to maintain some operations where you can operate with lower costs?
If BA need to fill slots at LHR, surely the best way forward would be to downsize at Gatwick and move some of the less price sensitive routes to LHR? So we could well see most, if not all routes, being operated from one or the other.
Prices may not automatically increase if a route moves from LGW to LHR. If they did, then that would suggest a low price elasticity of demand for BA fares, which we know isn’t the case due to the enhancements down the back and unbundling of fares. Upfront, we may see prices increase slightly due to the premium attached to a LHR departure and an increase in demand for seats from connecting traffic.
When the economy does recover, it’d be far easier to expand quickly at LGW again, having maintained a more streamlined operation than a complete withdrawal.
A rationalisation of the cabin crew fleets makes absolute sense in terms of operational efficiency and cost reduction. Surely this would’ve been a necessary next step for Cruz and his hatchets despite the pandemic and can only be a good thing for the future prospects of BA.
The company needs to shed cost now but maintain an ability to quickly expand again, but do so at a lower cost than it does today. Conceding territory at LGW is only going to increase competitive pressures once the economy grows again in the mid to long term.