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BWI To Pay BA $16.5 Million For LHR Flights  
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5260 posts, RR: 15
Posted (2 years 2 months 1 week 4 days 11 hours ago) and read 17296 times:

BWI airport is about to pay British Airways 5,5 million USD per year for the next three years if BA continues serving the BWI-LHR route. This is an extension of a controversial deal closed between the two in 2006.


I know secundary airports in Europe do this, but I didnt know International Airports offer those deals to Legacy airlines too.

Quote:

British Airways offers a daily nonstop flight to London’s Heathrow Airport from BWI. The London-based airline carried more than 108,000 passengers out of BWI in 2011, accounting for less than 1 percent of the airport’s total passenger business.

The state Board of Public Works is scheduled to vote on the three-year extension on Sept. 19.

The Maryland Department of Transportation, if approved, will pay British Airways a grant not exceeding $5.5 million per year over the next three years to offer service out of BWI. The airline must meet an 8 percent operating margin during that time period.


Source : http://www.bizjournals.com/baltimore...tish-airways-subsidy-contract.html

[Edited 2012-09-17 12:35:18]

49 replies: All unread, showing first 25:
 
User currently offlineC010T3 From Brazil, joined Jul 2006, 3728 posts, RR: 19
Reply 1, posted (2 years 2 months 1 week 4 days 11 hours ago) and read 17247 times:

Well, that's a small price to pay in order to keep Baltimore competitive.

User currently offlinekgaiflyer From United States of America, joined Jul 2008, 4320 posts, RR: 1
Reply 2, posted (2 years 2 months 1 week 4 days 11 hours ago) and read 17114 times:
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In addition to BWI and IAD -- DCA could probably fill an all business-class 318 or 319 bound for London if there were a way of doing offshore pre-clearances. There's simply no place at Reagan to put an FIS facility.

User currently offlineskipness1E From United Kingdom, joined Aug 2007, 3297 posts, RR: 1
Reply 3, posted (2 years 2 months 1 week 4 days 10 hours ago) and read 16921 times:

Nobody is going to use a slow and small narrowbody against a better wide body option on Washington. The little Airbus is very niche and I am not sure that's the best use of a LHR long haul slot.

User currently offlinePolot From United States of America, joined Jul 2011, 2314 posts, RR: 1
Reply 4, posted (2 years 2 months 1 week 4 days 10 hours ago) and read 16726 times:

Quoting kgaiflyer (Reply 2):
In addition to BWI and IAD -- DCA could probably fill an all business-class 318 or 319 bound for London if there were a way of doing offshore pre-clearances. There's simply no place at Reagan to put an FIS facility.

DCA is a no go due to the perimeter rule.


User currently offlinevinniewinnie From United States of America, joined exactly 9 years ago today! , 797 posts, RR: 0
Reply 5, posted (2 years 2 months 1 week 4 days 9 hours ago) and read 16467 times:

Can we talk about BWI please and the service in particular?

108,000 pax outgoing that is 295 pax per day assuming the service operates once a day. Is that even possible given that a ba 767 has only up to 252 seats?

Assuming it is 2 way traffic (so outgoing-ingoing) that is only around 150 pax per flight or 55-60% load factor which is not that bad but would mean that the flight would need very high yields to be successful.

Now question is the flight advertised enough? I've never seen any adds here in Montgomery or Frederick county, 2 of the wealthiest counties in MD and 2 counties that could realistically be a good target.

Also since MD is paying the difference between 8% profit margin and the cost/profit of the flight, what kind of a say does Md have in terms of prices/marketing/preferred landing rates for the flight?


User currently offlinethegreatRDU From United States of America, joined Mar 2006, 2311 posts, RR: 4
Reply 6, posted (2 years 2 months 1 week 4 days 9 hours ago) and read 16348 times:

I don't like the use of public funds to support air service for non existent demand since the market cannot support itself...BWI should be happy as a WN hub


Our Returning Champion
User currently offlinetexan From New Zealand, joined Dec 2003, 4284 posts, RR: 52
Reply 7, posted (2 years 2 months 1 week 4 days 5 hours ago) and read 15716 times:

Quoting thegreatRDU (Reply 9):
I don't like the use of public funds to support air service for non existent demand since the market cannot support itself...BWI should be happy as a WN hub

If it brings a net public benefit, e.g. tourists who spend more time and money in Maryland or businesses that remain in or relocate to Maryland partially because of the LHR flights, why shouldn't public funds be used? If the people traveling between BWI and Heathrow add more than $5.5 million annually to the Maryland economy, the subsidy in one area ends up being a profit in another. Everybody wins.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently offlinetonystan From Ireland, joined Jan 2006, 1445 posts, RR: 2
Reply 8, posted (2 years 2 months 1 week 4 days 4 hours ago) and read 15673 times:

Quoting kl911 (Thread starter):
The London-based airline carried more than 108,000 passengers out of BWI in 2011
Quoting vinniewinnie (Reply 7):
108,000 pax outgoing that is 295 pax per day assuming the service operates once a day. Is that even possible given that a ba 767 has only up to 252 seats?

Well BAs 767s only have 192 seats so in a 12month period that is a max of 70080 seats into BWI and the same out of BWI so I think that 108000 figure means BA brought 108000 through the airport. BA can offer up to 140160 seats on that route so if you ask me thats a pretty crappy load factor!

I can imagine BA coming off the route if the subsidy was dropped!



My views are my own and do not reflect any other person or organisation.
User currently offlinejetblast From United States of America, joined Nov 2004, 1231 posts, RR: 10
Reply 9, posted (2 years 2 months 1 week 4 days 3 hours ago) and read 15484 times:

Quoting tonystan (Reply 13):
Well BAs 767s only have 192 seats

Partially true - 189 of those are used for passengers, the other 3 are technically crew rest seats that are not used for customers.

The flight is very full in the summer (and remains so this far into the year). In the winter, not so much.



Speedbird Concorde One
User currently offlinelawair From United States of America, joined Jan 2009, 204 posts, RR: 0
Reply 10, posted (2 years 2 months 1 week 4 days 3 hours ago) and read 15477 times:

While load factors don't mean all that much, since we are discussing them, here are my calculations of the approximate load factors for the past few months of statistics, based on BWI's published statistics:

Aug '11 - 90%
Sep '11 - 86%
Oct '11 - 82%
Nov '11 - 74%
Dec '11 - 75%
Jan '12 - 66%
Feb '12 - 52%
Mar '12 - 75%
Apr '12 - 84%
May '12 - 87%
Jun '12 - 91%
Jul '12 - 87%

Quoting thegreatRDU (Reply 9):
I don't like the use of public funds to support air service for non existent demand since the market cannot support itself...BWI should be happy as a WN hub

I definitely agree with "texan" here. The article says there is a $117 million economic impact on the airport each year from this flight. For, at most, a $5.5 million investment, that kind of economic impact sounds pretty good, and probably is a win for taxpayers.


User currently offlineBurkhard From Germany, joined Nov 2006, 4405 posts, RR: 2
Reply 11, posted (2 years 2 months 1 week 3 days 23 hours ago) and read 15015 times:

Quoting thegreatRDU (Reply 9):
I don't like the use of public funds to support air service for non existent demand since the market cannot support itself...BWI should be happy as a WN hub

I tend to agree. An initial support for the first two years I find acceptable, but after years a service should pay for itself or be axed.


User currently offlineGeo772 From United Kingdom, joined Jul 2004, 519 posts, RR: 0
Reply 12, posted (2 years 2 months 1 week 3 days 22 hours ago) and read 14419 times:

The way I read this is that BWI will pay to create an equivalent 8% operating margin. Also given that the flight is operated by a 767 at the moment and it's easy to schedule a dedicated aircraft on the route then BWI might well see one of the early BA 787s there.


Flown on A300B4/600,A319/20/21,A332/3,A343,B727,B732/3/4/5/6/7/8,B741/2/4,B752/3,B762/3,B772/3,DC10,L1011-200,VC10,MD80,
User currently offlineFlyCaledonian From United Kingdom, joined Dec 2003, 2101 posts, RR: 3
Reply 13, posted (2 years 2 months 1 week 3 days 19 hours ago) and read 13439 times:

The State of Maryland obviously believes it is worth supporting this flight if required to keep an international connection. As others have said, that it is just to make sure BA achieves an 8% operating margin. Given BA's history of dropping supposedly profitable routes to open up new routes, if serving BWI didn't benefit BA I'm sure the route would have been dropped long ago. And I suspect that without the guarantee from the State of Maryland BA would drop the route and redeploy the aircraft at a shot.


Let's Go British Caledonian!
User currently offlinelapper From United Kingdom, joined Mar 2002, 1567 posts, RR: 7
Reply 14, posted (2 years 2 months 1 week 3 days 19 hours ago) and read 13383 times:

Quoting bombayhog (Reply 22):

In addition, arrival facilities are provided at a nearby hotel for showering etc.


User currently offlineiaddca From United States of America, joined Jul 2007, 286 posts, RR: 0
Reply 15, posted (2 years 2 months 1 week 3 days 18 hours ago) and read 12872 times:

The Baltimore region has neither the population levels nor the demographics to support European travel, and MD has serious intl service envy with the huge TransAtlantic schedule out of IAD. BWI is great for that cheap fare to Columbus, but besides that, it's a useless airport for anyone who doesn't want to cattle call.

User currently offlinePITrules From United States of America, joined Jun 2000, 3236 posts, RR: 6
Reply 16, posted (2 years 2 months 1 week 3 days 17 hours ago) and read 12300 times:

Quoting iaddca (Reply 26):
BWI is great for that cheap fare to Columbus, but besides that, it's a useless airport for anyone who doesn't want to cattle call.

Yet it's Washington's busiest airport...



FLYi
User currently offlinekgaiflyer From United States of America, joined Jul 2008, 4320 posts, RR: 1
Reply 17, posted (2 years 2 months 1 week 3 days 17 hours ago) and read 12274 times:
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Quoting iaddca (Reply 26):
The Baltimore region has neither the population levels nor the demographics to support European travel, and MD has serious intl service envy with the huge TransAtlantic schedule out of IAD. BWI is great for that cheap fare to Columbus, but besides that, it's a useless airport for anyone who doesn't want to cattle call.

There's a big difference between BWI's 'marketing' region and their 'service' region. For marketing, Baltimore is lumped in with Washington DC (40 miles south) and its suburbs. But if you walk through the parking lots, you find dozens of car license plates from Pennsylvania, Delaware, and Virginia -- as well as Maryland.

Probably more of a factor is that IAD, BWI, PHL, EWR, and JFK -- which all offer international service -- are way too closely spaced.

IAD-BWI = 45 sm
BWI-PHL = 90 sm
PHL-EWR = 80 sm
EWR-JFK = 21 sm


User currently offlineFI642 From Monaco, joined Mar 2005, 1079 posts, RR: 2
Reply 18, posted (2 years 2 months 1 week 3 days 14 hours ago) and read 10588 times:

The Maryland Aviation Administration paid Aer Lingus too. When the subsidy stopped, they left. Part of the reason Icelandair left was because they were not offered an incentive to maintain service at Baltimore.

British Airways is extremely important to BWI. The prestige of the carrier, and professionalism of their ground staff go a long way to improve the standing of Friendship, I mean BWI.

The Aer Lingus deal was even sweeter than what British Airways gets.



737MAX, Cool Planes for the Worlds Coolest Airline.
User currently offlinelawair From United States of America, joined Jan 2009, 204 posts, RR: 0
Reply 19, posted (2 years 2 months 1 week 3 days 14 hours ago) and read 10126 times:

Quoting FI642 (Reply 18):
The Maryland Aviation Administration paid Aer Lingus too. When the subsidy stopped, they left. The Aer Lingus deal was even sweeter than what British Airways gets.

Do you have an internal source for this? I have seen published reports that MAA was trying to lure Aer Lingus to return with some pretty hefty incentives back in 2007-08, but there didn't seem to be any evidence (in public) that Aer Lingus was receiving financial assistance while they were serving BWI. I don't doubt the need for the assistance during the 2002-2004 time frame however, as the route was on the bubble during that time. Pre 9/11, however, BWI was EI's most profitable route, according to the airline's own press releases.

Right now BWI is placing its European expansion hopes in Condor, which so far has done really well from BWI without any financial assistance, albeit at a very limited seasonal schedule.


User currently offlinejetblast From United States of America, joined Nov 2004, 1231 posts, RR: 10
Reply 20, posted (2 years 2 months 1 week 3 days 14 hours ago) and read 9766 times:

Quoting iaddca (Reply 15):
BWI is great for that cheap fare to Columbus, but besides that, it's a useless airport for anyone who doesn't want to cattle call.

If you say so. Many of the frequent fliers on the BWI-LHR flight (I am one) fly it not because of the 'cattle call' but because BWI is an incredibly easy airport to get to and fly from compared to IAD.



Speedbird Concorde One
User currently offlineFI642 From Monaco, joined Mar 2005, 1079 posts, RR: 2
Reply 21, posted (2 years 2 months 1 week 3 days 13 hours ago) and read 9520 times:

Quoting lawair (Reply 19):

The Baltimore Sun published it. Whether the archives online go back that far or not, I don't know, however, I do know it was there. It can be verified by a former BA Station Manager.

BWI is too convenient not to use for International flights. Aircraft to curb in 20 or so minutes simply cannot be beat.



737MAX, Cool Planes for the Worlds Coolest Airline.
User currently offlinekgaiflyer From United States of America, joined Jul 2008, 4320 posts, RR: 1
Reply 22, posted (2 years 2 months 1 week 3 days 11 hours ago) and read 7819 times:
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Quoting FI642 (Reply 21):
Aircraft to curb in 20 or so minutes simply cannot be beat.

You got that right. Even with no moving walkways.


User currently offlineAA94 From United States of America, joined Aug 2011, 605 posts, RR: 2
Reply 23, posted (2 years 2 months 1 week 3 days 9 hours ago) and read 7681 times:

Quoting vinniewinnie (Reply 5):
108,000 pax outgoing that is 295 pax per day assuming the service operates once a day. Is that even possible given that a ba 767 has only up to 252 seats?

Assuming it is 2 way traffic (so outgoing-ingoing) that is only around 150 pax per flight or 55-60% load factor which is not that bad but would mean that the flight would need very high yields to be successful.

It is a once daily flight, and I'm assuming they're counting two-way traffic.

Quoting vinniewinnie (Reply 5):
Now question is the flight advertised enough? I've never seen any adds here in Montgomery or Frederick county, 2 of the wealthiest counties in MD and 2 counties that could realistically be a good target.

I don't think it's advertised nearly well enough. People need to realize that, in its current state, BWI is good for more than just "cattle call" traffic.

Quoting texan (Reply 7):
If it brings a net public benefit, e.g. tourists who spend more time and money in Maryland or businesses that remain in or relocate to Maryland partially because of the LHR flights, why shouldn't public funds be used? If the people traveling between BWI and Heathrow add more than $5.5 million annually to the Maryland economy, the subsidy in one area ends up being a profit in another. Everybody wins.

  

Quoting jetblast (Reply 20):
If you say so. Many of the frequent fliers on the BWI-LHR flight (I am one) fly it not because of the 'cattle call' but because BWI is an incredibly easy airport to get to and fly from compared to IAD.

Absolutely right. I love the BWI flight because it's such a breeze to use. If I'm going to have to make a connection in JFK/ORD/DFW/MIA to get to Europe anyway, I'd rather just fly BWI-LHR-XXX and save myself some of the hassle.



Choose a challenge over competence / Eleanor Roosevelt
User currently offlinepoint2point From United States of America, joined Mar 2010, 2766 posts, RR: 1
Reply 24, posted (2 years 2 months 1 week 2 days 18 hours ago) and read 7291 times:

Only $16.5 Million?

It's up there, but still doesn't beat DEN's $22M to UA for the DEN-NRT nonstop.

 


25 commavia : I still contend that, at some point, perhaps in a few years when the AA-BA ATI/JV alliance is further deepened, this might be a viable market for one
26 vinniewinnie : I guess that if the flight achieved its targeted 8% operating margin the state of Maryland would absolutely have to pay nothing whatsoever! BWI flight
27 MasseyBrown : Correct. That is the reason I'm flying IAD-LHR in October. The WT+ fare was about 25% cheaper out of IAD than BWI. The fact that there is competition
28 2travel2know2 : While it sort of has its logic, BWI paying BA to keep flying BWI-LHR for the next 3 years Could BWI's USD16.5 cover Southwest/Airtran 3-year expenses
29 MasseyBrown : ^ Traffic beyond LHR helps fill the plane. You wouldn't get that with WN to LGW/STN, although a WN-level fare might fill it anyway. I have always assu
30 vinniewinnie : BA pretty much enables BWI and Maryland to be connected to Europe's main business center, it also enables BWI to be conveniently connected to Europe,
31 steeler83 : Zero as of June 2011. During the first year, June '09 to June 2010, the Allegheny Conference on Community Development and the State of PA ponied up t
32 AussieItaliano : Agreed. Remember that this flight is putting BWI in range of several one-stop key destinations in Europe and beyond. Companies based in Maryland who
33 ChinaClipper40 : The catchment area for BWI (the greater Baltimore area itself, Frederick, Aberdeen, Columbia, and the northern DC suburbs lying within Maryland's Mont
34 FI642 : Lest we forget: World Airways had scheduled service to LGW for years, TW has LHR service for quite a while. BA served LHR with L15's and 741's from Ba
35 capitalflyer : BWI would be crazy not to pay the subsidy. They have zero flights to Europe outside of the one daily BA flight. Lose that, and they should change thei
36 AussieItaliano : I think that you're entirely missing my point. Any secondary city such as MRS, DTM, HAJ, AAL, ABZ, OPO, BLQ etc. would be a city that is not served n
37 Post contains links kgaiflyer : It seems like this isn't the only BWI news. According to this morning's Baltimore Business Journal blog, BWI has been increasing passenger traffic ove
38 lawair : Well they do have seasonal scheduled flights to Frankfurt, even though those flights operated only twice a week this summer. Your point otherwise sta
39 vinniewinnie : It's a toss honestly, and 15 isn't necessarily a nice drive. Any hickup and that is it you miss your flight! 70 in comparison is a breeze though yes
40 N1120A : National has an FIS, just a very small one. Sort of like LGA. You do realize that pre-clearance is already done on BA's A318 flight at SNN, right? Th
41 kgaiflyer : Thank you for pointing out that the question was *both* asked and answered days ago. So I'm not sure what you're trying to accomplish with your post.
42 ChinaClipper40 : Not quite. Of the more than 100 biotech and pharmaceutical firms located within BWI's catchment area, here is the breakdown by location: 1) Rockville
43 hohd : You leave one hour prior to flight time for international flights at BWI ??? I thought the cutoff for checkin is 60 minutes at all airports for intern
44 jetblast : If he isn't checking bags he can go right to the gate as they are boarding the flight if he chooses. The agents there will verify his passport data a
45 Post contains links MasseyBrown : Assuming you believe the numbers that Annapolis generates in order to justify whatever Baltimore wants to do this week. In my experience, economic im
46 N1120A : LAX-DCA transcons operated more than 10 years ago. TWA was awarded the route in 2000 and AA was rather unhappy to realize that it wouldn't be transfe
47 Post contains images kgaiflyer : Yes, I flew AS IAD-SEA at the time. No laughing -- it was a good route. No one said it was odd. You appear to be -- for whatever reason -- editoriali
48 Post contains images AA94 : For sure. I've noticed the same, and I bet competition is definitely a factor. Also, I'd bet that many of the premium pax flying to Washington are go
49 jetblast : Side note, but if they book the middle BA flight into/out of IAD (BA265 and 264 respectively) they will be on a 767 also.
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