[Anonymous]

[VintageKrug]

An interesting day, well worth a look if you are interested in understanding the business in more detail.

http://www.thomson-webcast.net/uk/dispatching/?event_id=2eab89919034837c43056920ec35eb0f&portal_id=8f9f041ab76ea624a93bd34e37c94737

The first section explains how cabin crew costs have increased since the last cabin crew strikes in 1997, and the reasons for introducing New Fleet, and would be well worth watching for certain individuals here.

The only snippet of gossip was a redesign of the World Traveller and World Traveller Plus cabins which will feature on BA’s new delivery 777s from late Summer 2010. Will be interesting to see what these actually look like.

[MartynSinclair]

VK – extremely interesting from the BA persepctive. I presume you have access to the independant analyst reports explaining the mood of the city and investors as appose to the internal BA presentation to the analysts. The reports I’ve seen and briefings I ve attended show that the city is still behind WW, but time is running out. I suspect that if all the strike days do occur, that real pressure may start to flow and cracks from within the board room will start. Time will tell – thanks for posting the webcast.

[openfly]

Hi MartynS…
I agree with your comments about ‘cracks appearing’. But WW is on fairly safe ground that he will not be eased out. Amongst CEOs the position at BA is very low paid for such a large turnover. There are too many problems at BA to attract quality CEOs. It would be difficult to replace WW, so I think he can sleep in his bed unless he wants to go voluntarily. Dealing with the moronic cabin crew strikers, while trying to sort BA out, must be very depressing.

[continentalclub]

Although I appreciate the subjectivity of any interpretation of analysis, including my own, the UBS and Morgan Stanley notes that I’ve just read refer to industrial relations very much as a process which will be concluded, rather than a destabilising threat.

Other issues facing the company (and the wider industry in some cases) which rank with equal or greater promises include regulation, ash, AA ATI, Iberia, pensions, general cost-cutting, fuel and FX.

Comments include a belief that governmental compensation for ash-related costs will indeed be forthcoming to the industry.

The wider concensus seems to be strong institutional backing for the BA board’s overall strategy, of which IR is a part, and UBS rate BAY.L as a Buy with a target of 295p (188.5p ^ 2.0p).

[VintageKrug]

Here is the .pdf for anyone who doesn’t want to listen to the webcast I linked to in the first post:

http://media.corporate-ir.net/media_files/IROL/69/69499/01_ID_2010_Full_presentations.pdf

Slide 13 illustrates the stark difference in crew remuneration between gatwick (where the Union agreed to changes) and LHR (to which the Union has caused such disruption over agreeing to exactly the same changes).

[Potakas]

Thanks VK very helpful pdf, finally i understood what are the fleet plans for BA and what’s going on with ATI.

Cheers

[VintageKrug]

Some notes from the presentations, which should stimulate debate without having to sample death by powerpoint:

– introduction of the “espace” seat (is this the same as a space-saver, non-convertible seating?)

– refresh of 767s will happen later this year (good news for Moscow regulars!)

– Relocation of BA to JFK T8 alongside AA and IB (Don’t think that’s good news, but it has probably put the kaibosh on the planned BA drive through check in and any improvement in the pre-flight dining facilities which can be rather overcrowded at present).

– booking trends are damaged during specific strike dates, but they do recover strongly during normal running. Still concerned about brand erosion, WW said he does “have plans to rectify this after the action is complete”. SALE OF THE CENTURY on its way after the strike??

– Plan to share lounges with Iberia where possible (I think this might affect MIA/MAD/MEX more than most).

– At T5 BA will move from the current 80% of flights having jetway use to 95% jetway use with the opening of T5C next year. Good news, but why not 100%? Poor planning on BAA’s part again.

– 8 747s are currently grounded, but one is being brought back after the summer and will need a D-check before re-entering service until 2017.

– A380 deliveries have switched from the original plan of all deliveries in two years, to the first tranche of 4 arriving in 2013/2014 and deliveries ranged out over the next four years, all to help spread capex. HKG likely to be the first A380 route to reduce the three 747 in three hours to two movements of A380s to free up valuable slots.

– BA will seek government compensation (more likely from Europe) for the airspace closure and compulsory compensation under EC261, citing 9/11 precedent.

– Stated he reckoned it was a “gross over reaction” to close airspace and they have not even found any evidence of ash despite regular checks. WW calls the volcano “E15, as it begins with E and has 15 letters”.

– According to WW himself “CE is being sustained by transfer traffic” (am pleased WW gets this, as he has always said it’s in terminal decline as a stand alone product but he recognised that people flying premium longhaul expect a premium shorthaul product).

– Less good news for CE at Gatwick, as although not yet given the chop, there is much less transfer traffic there. I would expect an announcement on this shortly.

– New APD changes could close off the whole Domestic APD network if they go through. MAN especially. Could also reduce the viability of some more vulnerable longhaul services, too, as feeder traffic diminishes.

– The new AA/BA/IB will have 20% of transatlantic; still smaller than the other mega-carrier alliances

– WW “still believe something will happen with bmi” if Lufty decides to sell some its slots, but WW not interested in purchasing the airline.

– Cathay Pacific and Singapore Airlines also have rights to serve US from UK (didn’t know that, would be interesting if it ever happened).

– American and jetblue tie up is welcomed, and even though Lufty has a significant holding in jetblue, WW was hopeful that either AA/BA/IB might be able to purchase that or alternatively encourage membership of oneworld in due course (excellent news!).

– Someone mentioned that there would be a redesign of the WT/WT+ seats on the new delivery of 777s coming later this year, but I did not hear any reference to that; did I miss it?

– AA/BA merger would be completed by October 2010.

– !!!WARNING!!! Earn and burn AA/BA reciprocity would start on transatlantic from Day One = October 2010.

PS Can you spot the error on p104?

[BlackTower]

Why warning on earn and burn Jedi Master VK?

[continentalclub]

BlackTower: when AAdvantage members are able to redeem their AAdvantage miles on British Airways transatlantic services (which they’ve hitherto been unable to do) then it’s felt that mileage availability for BAEC members will come under pressure, particularly in Club World and First cabins.

This situation, it’s suggested, would be less of an issue were there more parity between BA and AA hard products, but as long as it’s felt that the BA procucts are better, the likelihood is that, for the same mileage redemption cost, more folks will try to redeem on BA.

Meanwhile, the p104 mistake really is something of a school-boy error!

[Potakas]

VK i haven’t read all the pdf but i though i read all about the fleet, where did you notice the refresh of the 767’s?

I am interest because it’s (not ”its ”:D ) my favorite and they use them on the LHR-ATH route which is the most common to me.

[VintageKrug]

refresh of 767s mentioned in the speeches, around p21 where you get a nice pic of the new espace seating (whcih I assume if for shorthaul aborad the new Airbii and embraers, but am not clear whether espace is a new thing or just more of the new-ish new seats).

[Tom Otley]

Thanks for posting that..

I’m curious where you’ve got the “espace” term from, and why you think that this is new seating.

I see that the picture is of new seats – not the ones currently fitted – but couldn’t it just be for illustrative purposes ? The caption “Targeted cabin interior investments to maintain standards…” doesn’t give anything away.
thanks

[VintageKrug]

The e-space seating was mentioned by Keith Williams. You can listen to it on the audio accompanying the first link.

There are some new style seats which are fitted to the most recent (not all of them) airbus shorthaul fleet (the ones delivered late last year/early this year). I haven’t been on one of these new airbuses yet so cannot say if the ones pictured are the same as these new seats, or are espace, or whether espace is one and the same.

I understand these do not “convert” into widened CE configuration like the old ones do, principally because they were finalised when the interim Snug Europe configuration was being used, and no-one saw a problem with that.

As it is my theory that some routes will have CE phased out, that these aircraft will be used on those routes and Domestic in future.

The pictured seats are I think not dissimilar to those installed in the embraers, though those are 2-2.

They normally are pretty careful which images they use on these presentations (apart from on p104 – oops!) as was the case last year with an full cabin artist’s impression was used which was indeed the new BA First Cabin, a full year ahead of it’s public release, which I posted on here (though no-one seemed to believe it was at the time).

Targetted cabin interior investments basically refers to the 767 fleet.

Though there is of course the rather exciting propspect of the new 777s being delivered from late 2010….and these are likely to have some innovative new bells and whistles.

[VintageKrug]

Or even “its public release”. Honestly, who are these idiots who cannot spell?

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