BA Configuration Change Announcement
Feb 9, 1999, 5:52 am
#1
Original Poster
Join Date: Jan 1999
Posts: 3,065
BA Configuration Change Announcement
BA have today confirmed that they will be reducing, by up to 50%, the number of Economy Seats on Intercontinental routes.
BA have decided they will steer themselves away from the Discount Economy sector by increasing First and Club Class capacity at the expense of Economy and by phasing out discounted fares.
MF
BA have decided they will steer themselves away from the Discount Economy sector by increasing First and Club Class capacity at the expense of Economy and by phasing out discounted fares.
MF
Feb 9, 1999, 6:12 am
#2
Original Member
Join Date: May 1998
Location: CH-3823 Wengen Switzerland
Programs: miles&more, MileagePlus
Posts: 27,041
Merry, I don't fully understand when I read that:
BA lost from oct-dec-98 75 Mio Pounds (compares with a win of over 80 Mio Pounds a year before) and this is due to OVERCAPACITIES in BUSINESS and FIRST (asian-crisis) if I believe Robert Aylings.
Folgen der Asienkrise belasten British Airways
1999-02-09 13:41:00 London (Reuters) - Die Folgen der Asienkrise haben im dritten Quartal des Geschäftsjahres 1998/99 (zum 31. März) das Ergebnis der British Airways (BA) belastet. Die Fluggesellschaft wies am Dienstag in London für die drei Monate Oktober bis Dezember 1998 einen Verlust von 75 Millionen Pfund (rund 213 Millionen Mark) aus. Ein Jahr zuvor war noch ein Gewinn von 80 Millionen Pfund erzielt worden. Firmenchef Robert Aylings sagte, die Wirtschaftskrise in Asien habe vor allem das lukrative Geschäft mit Flügen in der ersten und der Business-Klasse belastet. Größtes Problem seien die Überkapazitäten.
BA lost from oct-dec-98 75 Mio Pounds (compares with a win of over 80 Mio Pounds a year before) and this is due to OVERCAPACITIES in BUSINESS and FIRST (asian-crisis) if I believe Robert Aylings.
Folgen der Asienkrise belasten British Airways
1999-02-09 13:41:00 London (Reuters) - Die Folgen der Asienkrise haben im dritten Quartal des Geschäftsjahres 1998/99 (zum 31. März) das Ergebnis der British Airways (BA) belastet. Die Fluggesellschaft wies am Dienstag in London für die drei Monate Oktober bis Dezember 1998 einen Verlust von 75 Millionen Pfund (rund 213 Millionen Mark) aus. Ein Jahr zuvor war noch ein Gewinn von 80 Millionen Pfund erzielt worden. Firmenchef Robert Aylings sagte, die Wirtschaftskrise in Asien habe vor allem das lukrative Geschäft mit Flügen in der ersten und der Business-Klasse belastet. Größtes Problem seien die Überkapazitäten.
Feb 9, 1999, 6:59 am
#3
Original Poster
Join Date: Jan 1999
Posts: 3,065
Rudi: I think the losses today are a combination of a number of things.
BA did loose a significant proportion of it's First/Business Class traffic towards the middle of last year. This has now all but been recovered with premium traffic in January 1999 down by only 1.1% against January 1998. The UK got recession fever earlier than the rest of Europe and as a consequence business in the UK cut back on expences earlier than elsewhere, this business has (all but 1.1%) returned.
So BA is ahead of the cycle of other European carriers such as KLM & Swissair which are this quarter experiencing a significant decrease in premium traffic.
BA also suffered a charge as a result of a Japanese loan which fell due in Q3 and the high value of sterling also hit them hard - without these exceptionals a profit would have been reported. Overall traffic in January 1999 was up 11% on January 1998.
But BA have decided that as a longer term strategy they will generate more revenue from profit making premium traffic against loss making Economy traffic.
If necessary they will replace 747's with 777's to acheive this.
With OneWorld now in place they can if necessary encourage discount economy passengers to fly with the alliance airlines.
BA obviously have great confidence that there premium traffic will increase - forward bookings in January certainly indicate this.
MF
BA did loose a significant proportion of it's First/Business Class traffic towards the middle of last year. This has now all but been recovered with premium traffic in January 1999 down by only 1.1% against January 1998. The UK got recession fever earlier than the rest of Europe and as a consequence business in the UK cut back on expences earlier than elsewhere, this business has (all but 1.1%) returned.
So BA is ahead of the cycle of other European carriers such as KLM & Swissair which are this quarter experiencing a significant decrease in premium traffic.
BA also suffered a charge as a result of a Japanese loan which fell due in Q3 and the high value of sterling also hit them hard - without these exceptionals a profit would have been reported. Overall traffic in January 1999 was up 11% on January 1998.
But BA have decided that as a longer term strategy they will generate more revenue from profit making premium traffic against loss making Economy traffic.
If necessary they will replace 747's with 777's to acheive this.
With OneWorld now in place they can if necessary encourage discount economy passengers to fly with the alliance airlines.
BA obviously have great confidence that there premium traffic will increase - forward bookings in January certainly indicate this.
MF
Feb 9, 1999, 8:08 am
#4
Original Member
Join Date: May 1998
Location: UK
Posts: 76
This is a bold strategy that is going to be fascinating to watch unravelling.
BA already has a reputation for being expensive and uncompetitive (unfairly or not...)
Now it seems that they want to become a premium class airline operating out of premium class airports. If you want cheap seats then you should GO elsewhere and fly from cheap(er) (to run) airports.
Add to that the increasing number of companies who are cutting back on the class, and the frequency, of travel, I'm not sure who BA think are going to be filling those seats.
My own (shorthaul) experience this year has been that premium cabins have far more empty seats than last year.
What I can imagine they will do is Cherry pick routes and replace them with re-configured cabins (e.g. LHR-EWR/JFK/SIN/BKK).
Will we evntually have entire planes which are Club/First only?
BA already has a reputation for being expensive and uncompetitive (unfairly or not...)
Now it seems that they want to become a premium class airline operating out of premium class airports. If you want cheap seats then you should GO elsewhere and fly from cheap(er) (to run) airports.
Add to that the increasing number of companies who are cutting back on the class, and the frequency, of travel, I'm not sure who BA think are going to be filling those seats.
My own (shorthaul) experience this year has been that premium cabins have far more empty seats than last year.
What I can imagine they will do is Cherry pick routes and replace them with re-configured cabins (e.g. LHR-EWR/JFK/SIN/BKK).
Will we evntually have entire planes which are Club/First only?
Feb 9, 1999, 8:42 am
#5
Original Poster
Join Date: Jan 1999
Posts: 3,065
Spike: I think you are correct when you say BA will probably "cherry pick" routes to introduce expanded premium seating on.
You are also right that there was a contraction in the amount of premium traffic in the latter part of last year and to this is still the case in ClubEurope (short-haul).
However as I have already said advanced booking for premium classes are up on January 1998 and ClubWorld/First traffic is only down 1.1% against last year.
I understand what BA is seeing is premium traffic from other carriers transferring to BA as a result of the "dumbing down" of premium services in North American transatlantic carriers.
Carriers such as CO, UA and AC who have all but eliminated First Class are seeing their premium product passengers transfer to European carriers, notably LH, AF and in particular BA.
I think BA is working on the principal, that as more carriers eliminate First Class and dumb-down Business Class, BA will pick up some of their business.
Of course, First Class is so profitable that BA could conceivably reduce prices to fill seats and still make more profit (or less loss!) than by sell economy seats.
I agree it is an interesting proposition, but as you have said, if you already have a reputation as being expensive but offering great premium send service I think you may as well play on it.
MF
You are also right that there was a contraction in the amount of premium traffic in the latter part of last year and to this is still the case in ClubEurope (short-haul).
However as I have already said advanced booking for premium classes are up on January 1998 and ClubWorld/First traffic is only down 1.1% against last year.
I understand what BA is seeing is premium traffic from other carriers transferring to BA as a result of the "dumbing down" of premium services in North American transatlantic carriers.
Carriers such as CO, UA and AC who have all but eliminated First Class are seeing their premium product passengers transfer to European carriers, notably LH, AF and in particular BA.
I think BA is working on the principal, that as more carriers eliminate First Class and dumb-down Business Class, BA will pick up some of their business.
Of course, First Class is so profitable that BA could conceivably reduce prices to fill seats and still make more profit (or less loss!) than by sell economy seats.
I agree it is an interesting proposition, but as you have said, if you already have a reputation as being expensive but offering great premium send service I think you may as well play on it.
MF
Feb 9, 1999, 12:22 pm
#7
Original Member
Join Date: May 1998
Location: Cambridge, MA
Posts: 1,433
Spike - I used to travel from Europe to Africa on a regular basis, and there were times when neither love nor money were sufficient to secure a seat in the front of the plane. I anticipate that LHR-JNB and other routes will be significantly more profitable once the Club/First sections are expanded.
On the other hand, the Gabarone route has been axed...
On the other hand, the Gabarone route has been axed...
Feb 9, 1999, 9:10 pm
#8
Join Date: Jan 1999
Posts: 1,023
This is interesting. I have been using BA First from SIN to LHR over the last 6 months. I usually don't have a problem getting a seat. This week however, I am having a hell of a time getting on one of the Friday night flights. The best they can do is confirm me for Saturday and waitlist for Friday (on which I have been told I am at the top of the list because of my OW Emerald status 
). I could always transfer to another OW airline or change the route to somewhere in Europe and then connect, but I have become spoiled knowing that with BA I will be guaranteed a sleeper seat on their long haul flights. It will be interesting to see how this all pans out when most of the airlines still running first class eventually convert to all sleeper style seats (like AA, CX, QF and SQ are doing). Right now I think BA has the edge with its premium product (Spike baiting not intended 
).
). I could always transfer to another OW airline or change the route to somewhere in Europe and then connect, but I have become spoiled knowing that with BA I will be guaranteed a sleeper seat on their long haul flights. It will be interesting to see how this all pans out when most of the airlines still running first class eventually convert to all sleeper style seats (like AA, CX, QF and SQ are doing). Right now I think BA has the edge with its premium product (Spike baiting not intended ).
Feb 11, 1999, 7:44 pm
#9
Original Member
Join Date: May 1998
Location: Hong Kong soon to be London
Posts: 208
OMNI:
mgm,
The reason you are having trouble finding flights is due to Chinese New Year. Nearly everyone in Asia is taking all of next week off, so every flight out of HKG, SIN, KUL, TPE, and everywhere else is waitlisted. For my flight from Hong Kong to Bali I waitlisted two months ago on 8 flights each way and just cleared this morning!
HKF
mgm,
The reason you are having trouble finding flights is due to Chinese New Year. Nearly everyone in Asia is taking all of next week off, so every flight out of HKG, SIN, KUL, TPE, and everywhere else is waitlisted. For my flight from Hong Kong to Bali I waitlisted two months ago on 8 flights each way and just cleared this morning!
HKF
Feb 12, 1999, 3:37 am
#10
Join Date: Jan 1999
Posts: 1,023
Hong Kong Flyer -- yes, I knew Hua Ren Xin Nian was causing problems for inter asia flights but did'nt think London would be a problem, particularly in first class. e.g. can get to Paris very easily. As luck would have it a waitlist on QF9 cleared for me this afternoon, but I am still hoping for one of the BA flights.
Feb 16, 1999, 11:56 am
#13
Join Date: Jan 1999
Posts: 1,023
Merry -- as much as I fly First on BA, I fly rather more on AA (with a sprinkling of flights on QF and others). My strategy a while back was to keep it simple and only have a ff account with AA, particularly when the AA/BA alliance was anounced and then with the advent of oneWorld. Up until last Friday I have never had any trouble getting a seat on a BA flight, and as it turned out QF9 was a sleeper config so I got what I wanted in the end. I'm not sure they have figured out yet waitlisting for non BA oneWorld top tier ff's. The Singapore office claimed to have waitlisted me on both BA and QF - I decided to check with the main reservation desks of both to find out that I was not on any waitlist and further there was no waitlist at all for the flights. Anyway, the BA and QF people were very helpful and did do their utmost to get me on a direct flight.
In short, had a lovely weekend visiting my brother in Cambridge and managed to get an AA flight on Monday to DFW after being cancelled on several over the weekend. Next stop MEX!!
In short, had a lovely weekend visiting my brother in Cambridge and managed to get an AA flight on Monday to DFW after being cancelled on several over the weekend. Next stop MEX!!