Posts Tagged ‘British Airways’

Oil prices cause BA to push up fuel surcharge

Wednesday, December 15th, 2010

As a reaction to the rising price of oil, British Airways has announced that as of this Thursday it will be adding an extra £10 to the fuel surcharge on its long haul tickets. Because the new charge applies to each sector of a journey taken, the price of a return ticket to many destinations will rise by £20.

Airlines around the world first started adding a surcharge to ticket prices on longer journeys as a way of combating the rising price of jet fuel. The additional ‘tax’ now makes up a substantial portion of the value of most tickets. BA said it would not be placing the charge onto the price of its short haul flights.

The surcharge could now be as much as £108 depending on how far a customer is flying and the type of class they have chosen to fly in. BA has not increased its jet fuel surcharge since the middle of 2008 and has actually reduced it twice since that time.

According to the International Air Travel Association (IATA) the rising price of crude oil is going to be a major problem for many airlines over the next twelve months. The body predicts that the average price of a barrel of oil in 2011 will be $84. This year it was $79.

In August, the price of oil was hovering around the $72 mark; it is now just over $90 for a barrel. According to IATA, the price of jet fuel has risen by 17.6 per cent over the past year.

WestJet confirms interline deal with BA

Friday, December 10th, 2010

WestJet, Canada’s number two airline, has confirmed an inbound interline deal with British Airways. The pact will mean passengers will soon be able to travel across both airlines on a single itinerary. Passengers and their baggage will be transferred from their BA flight onto WestJet’s services without having to purchase a separate ticket.

Although an official press release is still to be drawn up, spokesman for WestJet, Robert Palmer, confirmed that a deal was in place. He said that more details would be forthcoming as tickets go on sale after Christmas.

WestJet already has interline agreements with American Airlines in the US and Europe’s Air France-KLM. The Calgary-based carrier also has a codeshare deal with Cathay Pacific. It is not unusual for interline pacts to turn into codeshare agreements which allow both carriers in the partnership to sell tickets for one another’s services. The advantage of codeshare pacts is that airlines can offer their customers a wider range of destinations without having to pay for the upkeep of their partner’s fleet.

Chris Murray, an analyst with the firm PI Financial Corp, said that at present there had been no discussion about upgrading the relationship. He added that the deal with BA was ideal for WestJet given the travel patterns between Canada and the UK. He went on to say that the deal was likely to increase that value of shares in WestJet.

WestJet hopes that the partnership with BA will not only offer more opportunities to boost revenues, but also provide a way in to the business market.

Singapore Airlines agrees to US antitrust fine

Thursday, December 2nd, 2010

Singapore Airlines Cargo has become the latest in an embarrassingly long line of global carriers to be charged with involvement in illegal price fixing. The airline has agreed a plea offer with the US Department of Justice of US$48 million. The airline was accused in the US of the felony of fixing cargo rates over four years from the beginning of 2002.

The agreement to pay the fine came after the airline considered all its available options and after discussions with legal representatives, according to a statement from Singapore Airlines. The carrier added that it had done everything to cooperate fully with the US authorities over the matter.

Singapore Airlines may now face an additional fine on the other side of the pond. European Union antitrust regulators are currently looking at 11 carriers, including Air France-KLM, SAS and Cathay Pacific, and their possible involvements in price fixing. If the agreement to pay the US penalty is seen by the regulators as tantamount to and admission of guilt it could affect Singapore’s appeal against a fine of €74.8 million.

Investigations in the US have so far resulted in fines against carriers totalling US$1.7 billion. Among those who have reportedly already paid up are Korean Air and British Airways who were both apparently fined US$300 million in 2007. Earlier this year Air France-KLM settled a US civil matter for US$87 million and China Airlines paid out a criminal fine of US$40 million in September.

The antitrust investigations have already seen four executives sent to jail with a number of others awaiting trial.

OpenSkies keen to expand operations

Wednesday, December 1st, 2010

Premium travel only carrier OpenSkies has announced that it would be keen to add capacity to its fleet. Currently flying four Boeing 757s between Paris and New York, and Paris and Washington, there are plans to add a third route some time in the New Year. Currently being considered are transatlantic destinations including Boston and Montreal.

Chief executive Dale Moss recently said that he would be keen to expand the fleet by up to another 20 aircraft. He added however that he was in no hurry and would probably wait until the business market had fully recovered from the economic problems caused by the global banking crisis.

OpenSkies will be able to capitalise on parent British Airways’ relationships with American Airlines and Spanish carrier Iberia. The airline has been operating since the middle of 2008 and has outlasted other premium-travel transatlantic carriers including Silverjet, Eos Airlines and MAXjet.

Doug McNeill of Charles Stanley Securities points out that it is not unusual for a second generation operator to capitalise on the failures of the first. He said that this is what BA had done with OpenSkies. He added that he was confident in the venture and that if it eventually folded BA was big enough to shoulder the loss.

According to Moss, around 10 per cent of the airline’s sales are to customers wishing to charter the whole aircraft. Recent passengers include pop singer Beyonce Knowles and the AC Milan and Real Madrid football teams. Christine Lagarde, the French minister in charge of finance, took a delegation on OpenSkies to China.

Air France KLM to add routes

Thursday, November 18th, 2010

Air France-KLM has announced that it is keen to add new routes to its roster in the Middle East, Africa and Asia. The carrier is particularly keen to concentrate on the bourgeoning Chinese market. Pierre-Henri Gourgeon, Air France’s chief executive, said he would like to see up to five new routes opening up in Asia by 2014.

The announcement follows a raise in the airline’s target for fiscal year profits of over €300 million. Air France-KLM also has its eye on expansion into the Americas and would like to attract carriers from Brazil and India to its SkyTeam alliance.

By adding to its fleet of Airbus A380 superjumbos, the airline aims to increase capacity by next summer by seven per cent. Gourgeon pointed out that this increase would not mean growth, but a return to the number of seats the carrier was offering before the banking crisis.

Analyst at London’s Macquarie Research, Paul Butler, said Air France-KLM had recorded excellent results for the last quarter. He added that he predicted the airline’s stock will outperform. Following one of the worst economic downturns in years, airlines around the globe are announcing a return to profit. European rivals British Airways recently said it had returned to profit after two years of massive loss. Deutsche Lufthansa also announced a return to form in the last quarter and US airline Delta said it was back into profit.

Last month, Air France-KLM recorded an overall increase in passenger traffic of 3.1 per cent. On Asian routes it was up by 5 per cent.

British Airways announces passenger increase

Thursday, November 4th, 2010

Following the devastation of the world’s banking crisis in which business travellers all but disappeared, British Airways has announced that, in October, it carried 4.6 per cent more premium class passengers than in the same month a year ago. Overall, passenger numbers were up for the airline by 3.9 per cent on last October. However, load factor was reduced by a percentage point for the month to 79.8 per cent.

Total passenger numbers increased from 2.76 million last October to 2.95 million this year. The number of passengers travelling in non-premium seats was also up by 3.7 per cent on a year ago.

The Court of Appeal this week delivered its ruling on BA’s decision to reduce the number of cabin crew it dedicates to services flying out of London’s main airport, Heathrow. A year ago, BA announced it would be reducing staff numbers as a cost cutting measure. Cabin crew union Unite rejected that plan claiming it would be in breach of contract and brought the case in front of the High Court.

The High Court found in favour of BA, but Unite was not content. The matter was then sent to the Court of Appeal. On Wednesday, the appellate court announced it would be upholding the decision of the High Court.

British Airways said it was pleased that its modest changes to crew numbers could remain in place and that it had been vindicated over the contracts issue. However, Unite is soon to ballot cabin crew members over possible future strike action.

Bmi announces daily flights to Libya

Tuesday, September 28th, 2010

Lufthansa owned, UK based, Bmi has announced plans to challenge British Airways by flying daily services to the Libyan capital, Tripoli. The airline has already put tickets on sale and the first flight is scheduled for 1 December. British Airways began its daily service in 1999 and up until now has been the only UK based airline to operate such a service on the route.

Bmi will be hoping to tap into business supplied by those travelling to and from Libya to work in the country’s lucrative oil and gas industry. A spokesman for the airline said there was also an increase in demand from tourists wishing to enter the country as a starting point to exploring North Africa’s Sahara Desert.

Many view Bmi’s decision as an indication that relations between the UK and Libya are improving. The country was condemned around the world for its involvement in the 1988 bombing of a Pan Am jet over the Scottish town of Lockerbie. The terrorist attack resulted in the deaths of 270 people.

Bmi’s Tripoli service will complement the services it flies to other African cities including Cairo, Addis Ababa, Khartoum and Freetown. The carrier is also used to serving other oil and gas-rich areas around the world including Riyadh and Jeddah in the Middle East, Aberdeen in Scotland and the Eastern European cities of Almaty and Moscow.

Other airlines flying to Libya from the UK are Libyan Airways, twice a week, from Heathrow and Air Afriqiyah which provides daily services from Gatwick.

French airspace closure causes UK flight cancellations

Thursday, September 23rd, 2010

Airline passengers trying to get to destinations within France face delays, disruption and cancellations as French air traffic control walks out on strike today. The controllers will join fellow public service workers to show their disapproval of President Sarkozy’s plans to push up the age of retirement. The closure of French airspace has resulted in the cancellation of more than 400 flights in and out of Britain.

Budget carrier Ryanair says it has been forced to cancel more than 200 flights which has infuriated boss, Michael O’Leary. He said it was because European governments, like the one in France, were unable to keep control of their own air traffic services that passengers and airlines were essentially being held to ransom by strikes.

British Airways has warned that it may have to cancel a number of services and has advised customers to call the airline before heading out to catch a flight. The flag carrier added that it would be redirecting flights and providing larger aircraft in order to accommodate as many passengers as possible.

A similar warning to passengers has been issued by easyJet. It says some services will certainly be affected and told passengers to find out what was happening with their flight before coming to the airport.

Eurostar has brought in British and Belgian drivers so that it will be able to run services as scheduled. It warned that there may however be some disruption at Gare du Nord in Paris. P&O said it will be running ferry services across the channel as usual.

British Airways’ cabin crew fight returns to the courts

Monday, September 20th, 2010

As neither side seems to be gaining any headway in the dispute between British Airways and cabin crew union Unite, the fight looks set to return to the courts. Unite said it intends to go to the Court of Appeal with a claim that BA’s staff reduction plans, the catalyst for the ongoing arguments, was actually a breach of contract.

BA has strongly denied to accusation pointing out that in February, the High Court ruled that the cost cutting measure was an acceptable one. A spokesman for the airline said it was prepared to fight against the accusation in the strongest possible terms.

As well as approaching the Appeals Court, Unite said it would be asking the European Court of Human Rights to look into how the Government deals with union ballots. BA was able to get an injunction against a proposed walk out because it claimed a number of the voting papers had been spoilt by union members making the whole vote invalid.

The union also intends to take up the matter of travel concessions with the High Court. Originally a dispute over staff reductions the fight between BA and Unite is now about the loss of travel perks to some 7,000 union members. BA initially told its staff that if they decided to walk out, they risked losing non-contractual concessions. Unite has been demanding that these perks be given back before any peace deal can be reached.

A spokesman for Unite said it was regrettable that the dispute would be returning to the legal arena, but added that BA’s unwillingness to compromise left no other choice.

BA and Iberia plan further acquisitions through IAG

Tuesday, September 7th, 2010

British Airways and Spanish airline Iberia have announced that they are planning on acquiring other global airlines, once their own merger into International Airlines Group (IAG) is finalised later this year. The announcement was made by BA head Willie Walsh during a recent visit to Mumbai, and although he said there are some 12 potential global firms which are under the IAG microscope, there have been no discussions as of yet ith any of the other airlines.

Mr Walsh said that BA and Iberia have looked at as many as 40 international carriers in their current search for new acquisitions, and have narrowed the list down to 12. He went on to add that there have not yet been any talks with the companies on the IAG list, although the search is focused on finding firms with similar strategic consolidation interests, which both BA and Iberia believe is good for the airline industry.

The merger between British Airways and Iberia into International Airlines Group is expected to be finalised later this year, and once the process is complete, the group will be one of the largest airlines in the world. The firm will be based in London, and both BA and Iberia will continue running day-to-day operations independently, although they will be under the same IAG corporate umbrella.