[FormerlyDoS]

SimonS1 – 11/09/2013 21:20 GMT

Good analysis.

[RonBrown]

Pity BA are leaving Lusaka, one of my first long haul flights was on a BOAC Britannia from Lusaka to London.

[craigwatson]

A serious problem BA has is that for any new route, they will need to axe an existing one, due to the lack of slots at Heathrow, so unlike Emirates they cant just keep adding routes to new destinations. So they do have a tendancy to cancel any underperforming routes to add capacity to already existing profitable routes. It is much harder for them to be imaginative and/or speculative when growth is stymied by a lack of space at Heathrow.

[FormerlyDoS]

craig

I understood that long haul aircraft availability was the prime constraint, currently.

BA acquired a number of slots from bmi for new routes and surely some of those are available for expansion?

[SimonS1]

Re the slots. Maybe just a question of deploying slots more sensibly. I still don’t understand why slots are being wasted on flights to places like Leeds Bradford.

[craigwatson]

The 2 above posts go hand in hand, Ba acquired new slots and are awaiting new long haul aircraft to fill them, hence slot sitting at places like Leeds, but when you are talking about just a handfull of slots, it still leads to maximizing revenue rather than speculation.

[sparkyflier]

Keith Williams revealed in an interview with Bloomberg that 12 slot pairs would be used for long haul expansion.

This provides for lots of new routes to be added, especially as many will not need a daily flight. This could be 2/3 for North America, 2 for South America, 2 for Africa, 2 for Middle East/India and the rest Asia.

A380s also enable some routes to have a less flights a day, for example lAX, JNB and in the future JFK.

Also bear in mind that 773s have been arriving with more on the way, so much more flexibility is available.

[SimonS1]

Craig – bottom line is there are slots available or which could be made available. That is not why Lusaka has been canned and does not prevent them starting new routes. There is capacity there if you use bigger planes and ditch routes like Leeds (or indeed make better use of regional airports).

The availability of the right aircraft is a different challenge and something that is/was within their control. A tough one given the substantial capex involved but then top airline execs are paid big money to get those calls right.

Keith Williams said BA are bringing in a new plane every 2 weeks for the next 18 months whilst EK have orders in place to do that for the next 5 years. You tell me who will clean up as the global economy recovers.

[craigwatson]

Thats the thing… 12 slot pairs is not much when you talk about 100’s of flight per day. If you are a company looking to maximize revenue are you going to increase capacity on routes that are profitable, or take a punt on a new route that may or may not be profitable, and even if it is still takes up to 2 years to show a profit due to the overhead costs of starting a new route.. (hotels, security, ground staff, transport, union negotiations) or just throw a new longhaul aircraft on an established route where all of the above are already in place and at no extra cost?

[FormerlyDoS]

Craig

12 slot pairs = 84 potential destinations.

To answer your question, if you have a strategy, it will guide you to the best choice.

[craigwatson]

well the best choice will always be a daily service that is profitable. so 12 new routes/flights, which like I was saying is not much. you start getting into a weekly service or 2/3 times per week, and it gets very expensive in terms of manpower as you then have flight/cabin crews downroute stuck in hotels for up to a week doing nothing. or deadheading back on the same aircraft taking up to 30 odd seats out of action, and then again removing that crew from duties for up to the next 96 hours.

People seem to get stuck in the BA era of the 80’s when it was there job to fly the flag to all points of the globe, now they are just another mulinational out to protect the interests of its shareholders, and NOT the interests of the UK plc.

Edited to add, weren’t some of those slots that BA got from BMI mandated by the regulator to be used for domestic operations only for a certain period of time as well?

[SimonS1]

12 pairs would comfortably give you 20 destinations on a daily or 3x a week basis.

Then start to combine some of the Madrid flights – consolidate BA and Iberia slots.

Then switch some of the point to point routes to LGW. Example – if Easyjet can fill 5 flights a day to Geneva from LGW then I’m sure BA could free up one pair.

There are ways if you want to do it.

Starting new routes is always a risk. I read on here that Indians are excited about the Austin route as it could be done 1 stop via LHR. If that is the case one of the Gulf carriers will soon be on the case.

[SergeantMajor]

BA does not have trouble filling 3x767s per week.

It has difficulty doing so profitably, an important distinction.

787s would undoubtedly reduce the need to uplift fuel, so this route may come back if the situation improves.

[sparkyflier]

I read that the Zambian government was looking to launch a new national airline, Air Zambia, to bolster trade and tourism etc, but was looking for a strategic partner.

This could have been/could be, an opportunity for BA to have a mini hub, to places which can be better accessed than via the Comair operation in Joburg much further south.

This hub could reach to Windhoek, Gaborone, Harare, Lilongwe, Lubumbashi, and domestic destinations. Lusaka Airport is not exactly slot restrained, so this could lend to an efficient and well run hub, providing to feed into each others networks.

[canucklad]

Morning Craig…..Your points are well founded, and of course IAG main responsibility is to their shareholders!

I do however firmly believe that UK PLC and BA & Virgin and BP for that matter are all dependant on each others success…..

If you have a company that makes short term decisions and plays it safe, it should come as no surprise that further down the line that company will impact other companies…. and not necessarily in the same industry sector…

And a classic example of this the UK lagging behind in China because LH/KL and AF managed to get a foot in the door before us !

If we don’t join the party and stay in it then don’t be surprised when we try to go back in to find all the other parties merrily getting on with each other, drink drunk and us standing in the corner all sad and alone looking on from the outside!

The Common Market for Eastern and Southern Africa is headquartered in Lusaka.

Zambia produces more copper than Canada and South Africa and improved copper prices and investment in mining have improved prospects for export earnings

Economic growth is averaging around 6% a year in recent years.

Zambia has a reputation for political stability and a relatively efficient, transparent government that should be encouraged to continue

Our loss is someone else’s gain…again

Edited to add….Just read your above post. Sparkflyer….Would love to see BA take the chance to invest in a Southern African airline, look at how succesful the tie up between KL & KQ has been….

Suspect that they will just do what they always do….look west!

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