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This blog’s predictions that all-business class airlines would go extinct have come true, with British Airways making an offer of $107.3 million for the last remaining major all-business class airline – France’s L’Avion. With one less competitor operating between Paris and New York, BA’s new OpenSkies airline will be able to dominate the route. In fact, since L’Avion was also operating Boeing 757s, they may now be combined to form a fleet of three Boeing 757s for OpenSkies. According to Reuters, L’Avion started in January 2007 and has transported 65,000 passengers. But the going was certainly getting tough as the price of oil crossed $140 per barrel, evidence of which are the recent spate of bankruptcies in the airline industry.
Big bird BA picks up the last fish in the river (Image Credit: Esox Lucius)
How does this impact the British Airways and OpenSkies brands?
The effect of this acquisition on the parent airline’s brand should be generally positive, due to two key factors. Firstly, the lack of competition would surely help the OpenSkies brand since there is no direct comparison for their services. Moreover, lack of competition results in lower price pressure – which means that OpenSkies can charge realistic higher fares and be profitable sooner than later. Secondly, the acquisition is of an all-business class airline, which adds greater value to BA/OpenSkies, since L’Avion had planes that offered more luxury to the customer. So instead of sprucing them up, BA just needs to remove some seats to include Economy class, if they choose to do so.
In the end, this means the end of cross-Atlantic all-business airlines, and bodes well for British Airways as well. A win-win situation for both the airlines. A questionable one from the customers’ perspective though.
What do you think? Will this help the customer? Please feel free to leave your comments below.
