British Airways’ all-business class from London to New York – is the OpenSkies brand dying?
British Airways announced yesterday that they will be launching all-business class flights from London to New York City in September. It will operate A318s fitted with 32 lie-flat seats on the route.
Why it makes some business sense?
Given that the likes of Silverjet and MaxJet have gone bust plying this route offers a couple of insights. Firstly, there’s inherent demand (we all know that) and that’s why these airlines could actually fly for some time. Secondly, it was largely British Airways and Virgin Atlantic that drove these airlines out of business. That means BA has less competition to deal with – just Virgin Atlantic. And that’s the opportunity.
Why it doesn’t make a lot of business sense?
We all know that OpenSkies is an all-business class airline that’s a subsidiary of British Airways. We also know that OpenSkies bought the French airline L’Avion to expand its business. Moreover, it wasn’t flying London-New York routes, but only New York-Amsterdam and New York – Paris, so as not to compete with British Airways. I feel that when BA decided to dive into the market with an all-business class service, they should have tapped on the OpenSkies brand.
Wouldn’t it be easier to just deploy one of the OpenSkies’ 757s on the route already equipped with Business beds and Business seats? They have a great brand experience that has been developed over time. And there would be no need to re-equip an A318 with Business Beds too.
On British Airways’ all-business flight, weekend leisure fare starts from £1,901.10 ($3,135) return, while the business fare starts at £4,912.10 and the fully-flexible business fare at £5,625.10. On OpenSkies, the fares are much cheaper, starting at just over $900 for Business Seats and at $1100 for flat Beds.
It’s difficult for me to reason out why BA would first start an all-business class airline, then have them acquire a competitor, then start one of its own service offering an all-business class configuration. And it’s bad for the OpenSkies brand too, since people might think that BA doesn’t trust OpenSkies to do the job.
But then again, that might really be the case.
End of the
road runway for OpenSkies?
One of the reasons to fly BA metal might be the long term viability of OpenSkies. Willie Walsh, the CEO of British Airways recently indicated that he might consider shutting down OpenSkies, given that it’s still a loss making entity. He noted in the latest edition of BA News that OpenSkies’ losses are small compared to those elsewhere in the company and that “closing it would have no material effect on our financial performance. But the team there knows that it will close if it does not deliver on its business plan”
So it might be the case that BA is thinking of shutting down OpenSkies if in a certain period of time it doesn’t turn a profit (which is very tough in this environment). And hence, instead of risking using the OpenSkies brand to start a new route, they’re taking a safer approach with the longer term in mind.
But frankly, I’m still unconvinced that this route should have been started on BA metal. What do you think? Is this a move in the right direction, or is there more than what meets the eye? Let’s discuss, in the comments section, and on Twitter (@simpliflying).