OAG Travel News

At a time when the credit-crunch is still crunching, premium cabin business travellers are dwindling, and airlines are viewing their yields with alarm, British Airways has reaffirmed its strategy of focusing on premium travel by finally going ahead with its long-planned launch of business-class only flights between London’s City Airport and New York’s JFK Airport on September 29. 
    Back in July, premium traffic at BA had fallen for 10 straight months.  The drop led to a record £375 million loss in the year that ended March 31 prompting CEO Willie Walsh to risk a strike this summer as he sought almost 4,000 job cuts. And BA has said it might cut more than 25 percent of its premium seats on some long haul routes.
    Fewer business travellers will be flying premium and those who do will be paying less, Walsh says.
    The International Air Traffic Association reports that premium traffic has fallen every month for a year – a 19 percent drop in the first quarter of this year; although premium traffic on the major trans-Atlantic market was showing signs of ‘stabilisation but not revival.’ Premium passengers count for up to 30 percent of airline revenue while only 7-10 percent of total passengers. IATA estimated that revenue from premium traffic was down 45 percent in May compared to the same month last year. 
    Although traffic volumes have improved more recently, costs are rising and ‘profitability remains distant,’ according to IATA. Scheduled traffic results for August showed that compared to August 2008, passenger demand was down 1.1%, (an improvement compared to the 2.9% decline in July); and passenger load factors improved by 1.2 percentage points to 80.9%. Despite the tighter supply and demand conditions average fares continue to be depressed (-22% for premium seats and -18% for economy).
    BA is operating Airbus A318s for its twice-daily London City-JFK service – the largest planes that are able to take off from City Airport’s 1,000 metre runway. They will be fitted with 32 fully-flat sleeper seats. Passengers can check in 15 minutes before departure time. On the westward route the planes have to refuel at Shannon in Ireland, where passengers are able to pre-clear U.S. Immigration to ensure a quick exit from JFK. The eastward trip is non-stop.
    Passengers on the new service will be the first to be able to send emails, texts and use the internet via an in-flight mobile communications service, provided by OnAir.
    The lowest fares are just shy of £2,000 for a round-trip (including taxes and charges). The restrictions are no refunds, no changes, the iniquitous Saturday-night stay, and a 42-day advance purchase. This compares to £1,897 for a business class ticket from Heathrow to JFK. 
    Meanwhile, OpenSkies, BA’s all business class airline, has suspended its flights between New York and Amsterdam and will ‘now re-focus’ on its remaining route, New York-Paris, with which it started operations in June 2008. 
    Dale Moss, managing director of OpenSkies, said back in June this year, said it would ‘persevere’ despite a drop of around 45 percent in business traffic. This was already amid gloomy forecasts for world airlines, high fuel costs and dwindling demand, and the collapse of premium class niche carriers, such as Silverjet, Maxjet and Eos. 
    Lufthansa pioneered business class only flights across the North  Atlantic back in June 2002 between Dusseldorf and New York Newark, with 48-seat Boeing Business Jet (737-800s with winglets) at normal business-class fares – which has since  been replaced by an Airbus A340 with a classical three-class service.
    But in July, 2007, Lufthansa started all-business flights from Frankfurt to Newark with 44-seat Boeing 737s;  followed by all business class service from Munich to Dubai (May 2008); and Frankfurt to Pune, India (July 2008), with 48-seat Airbus A319LR business jets, both at business-class prices.
    Today, only the Frankfurt-Pune service survives.
SWISS, however, still operates all-business-class flights between Zurich and New York (Newark) with a 56-seat Boeing Business Jet, at normal business-class fares; and KLM operates the same type plane with 44 seats from Amsterdam to Houston.
In August, 2008, less than three months after Singapore Airlines launched non-stop all-business class flights between Singapore and New York Newark, the carrier launched a similar service to Los Angeles.
Both services are operated by Airbus A345s, configured with just 100 of Singapore Airlines’ new flat-bed business-class seats arranged in private pods in 1-2-1 formation allowing every passenger direct access to the aisle. The seats are 76 centimeters wide – almost 50 percent wider than most competitive business class products.
The promise of the business-class-only model is to ride in the next best thing to a corporate jet; passengers enjoy a similar ambiance, discretion and comfort; a smaller cabin with fewer people allows exclusive hassle-free check-in and faster boarding and disembarking; lounges and limos, and lie-flat sleeper seats that business-class travelers expect, at fares comparable to those in conventional premium cabins.

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