British Airways has taken delivery of its first B787-10 Dreamliner. The aircraft (registration G-ZBLA) arrived without fanfare yesterday into London Heathrow.
(Aviation enthusiasts can watch a video of the landing, courtesy of Big Jet TV at the 48 minute mark.)
The B787-10 is the largest of the three variants of the B787. British Airways already flies the B787-8 (in three classes: economy, premium economy and business class) and the B787-9 (which has four classes with the addition of the First Cabin).
The B787-10 has four classes as well, with eight seats in first class, 48 in business (Club World with the new business class suite), 35 in premium economy (World Traveller Plus) and 165 in economy (World Traveller).
British Airways has 12 B787-10s on order, six of which were due to arrive this year. It currently has 12 B787-8 and 18 B787-9 aircraft.
The intention was for the aircraft to debut on Atlanta.
The configuration of the aircraft points to the challenges British Airways will face in coming years.
Its reliance on high yield premium traffic is shown by the aircraft carrying just 256 passengers, well under the numbers carried by other carriers (Singapore Airlines has 337 passengers on its B787-10 while KLM has 344 passengers). The difference comes because of the large number of premium seats on board – which take up more room than the economy class seating.
In good times, focusing on premium traffic makes sense. The question is now when will those premium travellers return, and in what numbers.
Willie Walsh, CEO of IAG, owner of British Airways, gave evidence to the UK Government’s Transport Committee last month (see video below at 12.30).
He identified the challenge for British Airways as being “whether business travel responds at the same rate as leisure travel” once demand returns.
“British Airways has a much bigger exposure to business travel than the other airlines in the [IAG] group”, Walsh said.
In response to criticism that while British Airways is the most profitable of the airlines in the IAG Group, it is taking the most drastic action to cut costs, Walsh was characteristically unapologetic.
“British Airways has the lion’s share of invested capital in the IAG Group so therefore you would expect it to make the lion’s share of the profit.”
“Unfortunately it’s also the case that British Airways has also probably got the highest fixed cost base of all the airlines in the IAG Group and therefore when we look at the financial impact of this downturn, the swing from profit to loss is going to be much greater at British Airways.”
“The risk for BA is that… typically it’s got 60 per cent of the invested capital and makes 60 per cent of the profit [in the Group], but in the downturn unless British Airways significantly reduces its costs it is going to make significantly bigger losses than the rest of the airlines in the IAG Group, and that’s exactly what we saw in the first quarter.”