Pricing under open skies

[Scrooge]

This may well be the wrong forum.

With Bermuda II disappearing next year do you think there will be a downward pressure on the pricing of flights.

AF have already announced that they will start LHR - LAX with their own aircraft plus code share with DL on other routes out of LHR.

Of course this is great for us the pax but what effect will it have on the airlines ? Specifically VS, more cut backs in the perks in UC or maybe the powers that be will start to add stuff back to try to stand out from the rest?

Im too am not sure if this is the right forum....shall we let the powers that be decide?!


In answer to your questions it will be very interesting to see what, if anything, happens/changes.

Rumours are flying around that the dark side are about to announce an all business class concept using their 752s which are due to leave the eurofleet. Apparently they will be doing a sort of L'Avion/Eos operation but from Û airports.

I would imagine that VS will adopt a bit of a laissez faire approach to the whole situation following along the lines of BD. Ie: They wont do anything, just wait and see what happens. THis would be sensible given the size of VS. I would imagine with the arrival of 787 we may seem some more unusal operations from VS.


As for the big players- I don't really see the likes of LH/AF all moving into LHR en masse- sure they may operate one or two routes ala AF style on the LAX route but this is really no different to NZ on the route at the moment.

Are we going to see the likes of EK/QR opening up at LHR- no I dont think so, these "new generation" carriers seem to be more concerned with opening new routes from their hub cities or establishing hubs at smaller European airports (like EK in Hamburg and Jet in Brussels).

To be honest I see that a few extra carriers will arrive on a few routes, we, I dont believe, are about to see 20 airlines flying LHR-PHL for example but we could see a random airline doing the route (a bit like AI fly to JFK).


As for the American carriers. Well this is make or break for them. They have, for years, been trumpeting on about the unfairness of B2. Now is their time to prove that they can make it work. Will the inflight product of DL/NW/CO et al be able to stand up against BA and VS- maybe not but they will have their frequent flyers onside.

Price- I don't believe will change that much to be honest. Everyone was saying that Zooms entry on the JFK route would bring prices down, which it hasnt really.

The real losers in all of this will be the traveler who wants an excellent frequency to Strasbourg or Lyon from LHR. It is exactly these routes that will go to make way for the likes of DL.

It will certianly be interesting to see what happens next spring/summer next year.
I expect alot of lower fares from all airlines in order to stay competitive.
I dont know the number of flights daily for LHR-JFK/EWR at the moment but this will certainly rise as most airlines (i think) will see this as it is the most popular route.

It's certainly going to make for interesting times.

What will the open skies deal mean to slots on the ground though? Will it mean some carriers selling up / sacrificing (especially those serving short haul in EU / UK)?

I'd like to see what happens with the Transaltantic products of those that don't already serve LHR. I'd hope that the likes of CO, Northwest, etc bump their service up to reflect the likes of VS and BA.

As I said, interesting times...

Willd adds a lot of thoughtful comment with which I concur, however I do think we are going to see more carriers than the odd one or two: AF, Delta, NWA, Continental are all in the game albeit that only AF is truly new, the others propose to switch their flights from Gatwick or code share. We haven't heard yet from Lufthansa, and I think they'd be interesting. Then what about SIA going around the world, or Qantas, and I wouldn't rule out Emirates continuing some flights to New York?

It is BA currently that I see being in a lead position - they have new planes coming (in the near term extra 777s before the 787s and 380s), and as Willd says T5 won't handle their 757s so either they go to other terminals or Europe ... I think BA will take the risk and the lead because many other airlines don't have the ability. That means BA from continental Europe, so perhaps Madrid, Rome or even striking in France and Germany? Madrid I would think a plum one.

As for Virgin, I can't see where the aircraft are coming from to start up loads of new routes in 2008 or even 2009? The 346s have dried up, the 787s will be a while yet and the 380s deferred ... unless there's some quick buying on the used plane lot?

One factor that seems to be helping is London City Airport - flights there are fast expanding and for city workers it is more convenient than LHR, so the LHR slots can be freed to do transatlantic for those that have them.

As for the US carriers - I can see them expanding into London. They have a strong track record of shutting down unprofitable routes and opening up profitable ones. Their restriction is not planes but slots, and they have huge captive corporate customers to fill the high revenue seats.

As for prices ... well has anyone noticed a drop since Eos, Maxjet or Silverjet? Err no. So maybe it will be business as usual for VS with the bean counters determining perks!

And as if by magic, the dark side have gone and announced that starting next summer they will be flying CDG-JFK using a 757. I dont think its all business though.

Link to site is in French only and also on a.net.


Slinky I would agree with you re: LCY.

On the SQ front- they wont be opening up at LHR until they sell there stake in VS. I just cant see the two airlines going head to head like that. QF would be an interesting one but likewise will they want to annoy BA?

As for EK and the likes of QR, 9W, it will be very interesting to see. I immediatly thought we wouldnt see them bundle into LHR to operate to the States purely because of the amount of time and effort they have put into opening other European hubs and due to their long range a/c. Having said that- I doubt, in the case of EK, LH saw them opening up on their doorstep and more importantly, NZ and QF certainly did not see them starting (and being so successful) on the Kangaroo route and trans ditch routes. So who knows.

The reason behind me saying few airlines will start up these kind of operations is really because I believe there are only a few European carriers (BA, LH, AF) that can do it and thus they wont all want to over saturate the market. SK, OS, AZ, IB, TP, either have too small a fleet or are in the back pocket of one of the bigger carriers or as in the case of AZ having a few problems with their bank manager.
One thing is clear VS and BD will be very wise to play the waiting game- they just do not have the clout to go operating around Europe- they have way too much to loose.

Well in the last few years, we've seen both extra investment and a cut back in frills eg. investing in new CH and, for example, cutting back on red cushions.

45.

This has been covered by most of the broadsheets today and the FT.

Basically here is an update on how things are panning out after the DL/AF-KLM announcement.


BA have announced they feel that they need to merge with AA and buy BD in order to be able to compete against the AF/DL mega airline.

VS have said they will oppose any merger of BA and AA and any sale of BD to BA. VS also confirmed they are looking into the possiblity of buying bcj's or a319s to operate all UCS across the pond from European cities.

And on the BBC even the so called aviation analyst said only in theory would it lead to lower fares [:p].

I think Virgin need to stop crying unfair and take some affirmative action, or just go quiet while truly working out their plans. At the moment VS seems to be being outmanouvred by everybody ...

All UCS in a narrow body sounds horrid to me [:?]