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LJ
Posts: 5286
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Re: IAG Post Covid Fleet Plan Summary

Sat May 09, 2020 9:08 pm

mattyfitzg wrote:
Quite honestly, I have no idea, but with LCYs location to the City and Canary Wharf, and the talks of U.K. Lockdown restrictions easing, id imagine the financial district is where the demand could come from, as it always has been.


Which easing of UK lockdown restrictions? Everybody who enters the UK needs to go in a 14 day quarantine as of the end of May. As such don't expect anybody to travel to LCY.
 
mattyfitzg
Posts: 261
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Re: IAG Post Covid Fleet Plan Summary

Sat May 09, 2020 9:20 pm

LJ wrote:
mattyfitzg wrote:
Quite honestly, I have no idea, but with LCYs location to the City and Canary Wharf, and the talks of U.K. Lockdown restrictions easing, id imagine the financial district is where the demand could come from, as it always has been.


Which easing of UK lockdown restrictions? Everybody who enters the UK needs to go in a 14 day quarantine as of the end of May. As such don't expect anybody to travel to LCY.


I mean the Jo Public restrictions are supposedly easing soon, don’t forget it also has a large domestic network, CF operating IOM EDI GLA DUB and on occasion MAN but I don’t think we’ll see that back anytime soon. But yes, granted the 14 day quarantine will likely shaft any plans currently in the works.
 
anstar
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Re: IAG Post Covid Fleet Plan Summary

Sat May 09, 2020 9:47 pm

LJ wrote:
mattyfitzg wrote:
Quite honestly, I have no idea, but with LCYs location to the City and Canary Wharf, and the talks of U.K. Lockdown restrictions easing, id imagine the financial district is where the demand could come from, as it always has been.


Which easing of UK lockdown restrictions? Everybody who enters the UK needs to go in a 14 day quarantine as of the end of May. As such don't expect anybody to travel to LCY.


Can't believe it's taken them so long to do this. In Australia we had the home quarantine from around mid march... it had limited success before the govt then made 14 day quarantine mandatory in a hotel protected by defence force for 14 days. That has slowed the amount of the virus in the community here.
 
concordeforever
Posts: 123
Joined: Thu Sep 22, 2016 6:51 pm

Re: IAG Post Covid Fleet Plan Summary

Sat May 09, 2020 11:27 pm

The "lockdown" in the UK has been pathetic. Far too many people ignoring it and going out to DIY stores, parks, etc. Not enough police to enforce the rules, and good weather don't help. Flights from China to Heathrow have never stopped since the whole virus issue started, and until now nobody has been tested upon arrival to the UK, including the thousands of people over the last month on repatriation flights from all over the globe.
Anyway back on topic : British Airways are expecting to restart passenger services in July with 10% of flights operating initially. This will go up to 45% for Q3, and 70% for Q4. 2019 passenger levels are not expected to return until 2023.
 
LJ
Posts: 5286
Joined: Wed Nov 17, 1999 8:28 pm

Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 7:21 am

mattyfitzg wrote:
I mean the Jo Public restrictions are supposedly easing soon, don’t forget it also has a large domestic network, CF operating IOM EDI GLA DUB and on occasion MAN but I don’t think we’ll see that back anytime soon. But yes, granted the 14 day quarantine will likely shaft any plans currently in the works.


However, it is not Jo Public who flies into LCY. Their main market are bankers (or banking related), who now work from home as officies are closed. The foreign destinations (AMS, ZRH, LIN/MXP) acount for a very large share and I wonder how much traffic there is to EDI when RBS works from home. If my company (large financial institution in The Netherlands) is a proxy, you won't see much bankers flying around before September. As such first ensure you can fill your flights from LHR before starting LCY.
 
QF744ER
Posts: 416
Joined: Mon Jun 21, 2004 7:59 am

Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 8:20 am

Channex101 wrote:
[quote="EDP]

For anyone interested, the two 777s being "converted" to freighters (having the seats taken out) will be G-YMMG and G-YMMK.[/quote]

By "converted" is it just a temp conversation (just economy seats out) or as talking full on fright conversion here.[/quote]


Has -YMMG already undergone conversion as I see it’s just spent a week on the ground at LHR before operating an outbound flight to NBO?
 
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Vasu
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Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 11:08 am

With these quickly-converted freighters, isn’t loading and unloading going to be a pain in the backside? Surely loading everything through passenger doors must take forever?
 
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F737NG
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Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 11:51 am

There may be a push by UK airlines to allow all passengers to take a quick(er) test as per the ones available at Vienna and Dubai airports to avoid the 14-day quarantine being imposed.

https://www.euronews.com/2020/05/06/coronavirus-travellers-charged-190-at-vienna-airport-to-avoid-14-day-covid-19-quarantine

https://www.cntraveler.com/story/emirates-is-giving-rapid-coronavirus-tests-to-passengers-before-boarding


airzona11 wrote:
All this capacity reduction is going to drive prices up, paired with less demand, further reducing demand. That being said BA has LHR and the more premium heavy O/D airport.


That's the rationale behind adding more economy seating, to increase supply in order to be able to offer reasonable ticket prices for travellers at the price-sensitive end of the market. Cash is king. Any to offset the losses being incurred right now is going to be welcomed.
 
chonetsao
Posts: 605
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Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 1:48 pm

F737NG wrote:
There may be a push by UK airlines to allow all passengers to take a quick(er) test as per the ones available at Vienna and Dubai airports to avoid the 14-day quarantine being imposed.

https://www.euronews.com/2020/05/06/coronavirus-travellers-charged-190-at-vienna-airport-to-avoid-14-day-covid-19-quarantine

https://www.cntraveler.com/story/emirates-is-giving-rapid-coronavirus-tests-to-passengers-before-boarding


airzona11 wrote:
All this capacity reduction is going to drive prices up, paired with less demand, further reducing demand. That being said BA has LHR and the more premium heavy O/D airport.


That's the rationale behind adding more economy seating, to increase supply in order to be able to offer reasonable ticket prices for travellers at the price-sensitive end of the market. Cash is king. Any to offset the losses being incurred right now is going to be welcomed.


Well, your argument is based on the assumption that the drop in capacity is outpacing the drop in demand (thus to flood the market with more capacity to reduce the price in order to lure demand, really?).

However, with the weekly cut of flights frequencies into June and July, and even to September currently we see in aviation world suggest the future capacity is still way over the actual and projected demand.

Thus the smart thing to do is to try to charge more per available seats as anyone who would be travelling in coming few months would be the captured audience, not to reduce fares. In the near term, the demand won't spike or increase due to cheaper fares. The demand will be tied to the personal choice over the concern of health complications. Cheap economy class tickets won't lure people to travel unless people feel safe to do so.
 
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F737NG
Posts: 59
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Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 3:18 pm

chonetsao wrote:
Well, your argument is based on the assumption that the drop in capacity is outpacing the drop in demand (thus to flood the market with more capacity to reduce the price in order to lure demand, really?).

However, with the weekly cut of flights frequencies into June and July, and even to September currently we see in aviation world suggest the future capacity is still way over the actual and projected demand.

Thus the smart thing to do is to try to charge more per available seats as anyone who would be travelling in coming few months would be the captured audience, not to reduce fares. In the near term, the demand won't spike or increase due to cheaper fares. The demand will be tied to the personal choice over the concern of health complications. Cheap economy class tickets won't lure people to travel unless people feel safe to do so.


No.
The supply is going to be cut by reducing the number of flights offered. However, on those flights that do operate, you now have many more economy seats available to try and bring in the necessary revenue.

How can you charge more during a recession? That's ignoring reality.

There's nothing to be done in the short-term other than run some services and attempt to sell at just above marginal cost so as to at least bring in some cash to try and survive until there's a pick-up in travel.

At some point (when testing is more commonplace) there will be evidence that either proves that Covid-19 is not as fatal as the current CFR suggests or measures reducing exposure are fully implemented and strictly followed.

The alternative is that the majority of the World's airlines go under.
 
Vicenza
Posts: 85
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Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 8:00 pm

F737NG wrote:
chonetsao wrote:
Well, your argument is based on the assumption that the drop in capacity is outpacing the drop in demand (thus to flood the market with more capacity to reduce the price in order to lure demand, really?).

However, with the weekly cut of flights frequencies into June and July, and even to September currently we see in aviation world suggest the future capacity is still way over the actual and projected demand.

Thus the smart thing to do is to try to charge more per available seats as anyone who would be travelling in coming few months would be the captured audience, not to reduce fares. In the near term, the demand won't spike or increase due to cheaper fares. The demand will be tied to the personal choice over the concern of health complications. Cheap economy class tickets won't lure people to travel unless people feel safe to do so.


s or measures reducing exposure are fully implemented and strictly followed.

The alternative is that the majority of the World's airlines go under.


But that is not practically possible as a solution, and would indeed only be so if followed worldwide but we all know that's certainly not going happen in certain countries. In fact, to 'strictly enforce' the measures you mention may very well result in the majority of airlines going under. If so, so be it, and while it may be harsh and 'unholy' to say it on an airline forum the harsh truth is the world doesn't solely revolve around the health of airlines.
 
airzona11
Posts: 1745
Joined: Wed Dec 17, 2014 5:44 am

Re: IAG Post Covid Fleet Plan Summary

Sun May 10, 2020 11:33 pm

F737NG wrote:
There may be a push by UK airlines to allow all passengers to take a quick(er) test as per the ones available at Vienna and Dubai airports to avoid the 14-day quarantine being imposed.

https://www.euronews.com/2020/05/06/coronavirus-travellers-charged-190-at-vienna-airport-to-avoid-14-day-covid-19-quarantine

https://www.cntraveler.com/story/emirates-is-giving-rapid-coronavirus-tests-to-passengers-before-boarding


airzona11 wrote:
All this capacity reduction is going to drive prices up, paired with less demand, further reducing demand. That being said BA has LHR and the more premium heavy O/D airport.


That's the rationale behind adding more economy seating, to increase supply in order to be able to offer reasonable ticket prices for travellers at the price-sensitive end of the market. Cash is king. Any to offset the losses being incurred right now is going to be welcomed.


Airlines went bankrupt with the model of chasing capacity and ignoring yield. Airlines are not going to flood the market with seats. If they do go with denser cabins, they are going to reduce overall flights. That takes cash to reconfigure, so it will be for the long term if they do. In the near term they can fly reduced schedules.

Now if regulators force airlines to fly planes with empty seats for distancing, this is going to cause airlines to lose revenue and passengers to pay higher ticket prices. No one wins in that scenario.
 
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F737NG
Posts: 59
Joined: Thu Aug 30, 2018 7:12 pm

Re: IAG Post Covid Fleet Plan Summary

Mon May 11, 2020 2:54 am

Vicenza wrote:
But that is not practically possible as a solution, and would indeed only be so if followed worldwide but we all know that's certainly not going happen in certain countries. In fact, to 'strictly enforce' the measures you mention may very well result in the majority of airlines going under. If so, so be it, and while it may be harsh and 'unholy' to say it on an airline forum the harsh truth is the world doesn't solely revolve around the health of airlines.


'Strictly enforce' means whatever authorities of a specific country decide. Some will prohibit all travel, others will allow full travel with hardly any caveats.

In my comment, I meant the term to be the wearing of face masks by all passengers and crew at all times, no travelling when presenting symptoms, a temperature check before passengers or crew reach the gate area, hot towels / hand sanitiser for all passengers, the list goes on...
The point is not all airports and airlines are undertaking these measures yet and no consistent rules between different countries.

A lot of attitudes and actions will change once air travel picks-up again in the next few weeks.
While the World "doesn't solely revolve around the health of airlines", air travel is important to many countries and will be the catalyst to jumpstart their economies.


airzona11 wrote:
Airlines went bankrupt with the model of chasing capacity and ignoring yield. Airlines are not going to flood the market with seats. If they do go with denser cabins, they are going to reduce overall flights. That takes cash to reconfigure, so it will be for the long term if they do. In the near term they can fly reduced schedules.

Now if regulators force airlines to fly planes with empty seats for distancing, this is going to cause airlines to lose revenue and passengers to pay higher ticket prices. No one wins in that scenario.



Who said anything about flooding the market with seats? I only said to add more economy seats.

That will come at the expense of some premium seating, but not all.
It's unlikely that BA will come anywhere near filling all 56 J seats on a 77W or all 86 J on a 744 any time soon, so take out two rows of J (16 seats on both types) and replace them with 5 rows of Y (~50 and 45 seats respectively).

J seats only earn an airline 4x as much income as a Y seat when they are filled. As stated by concordeforever earlier, "2019 passenger levels are not expected to return until 2023."
In the aftermath of the GFC, my previous firm restricted travel to economy for flights < 8 hours until 2017. It wouldn't surprise me if type of company policy was replicated by lots of businesses.
So why carry the extra weight of J seating until sometime (maybe) in 2023 and choose to forgo the opportunity to fill the space with Y? Refitting cabins costs money, yes, but the opportunity cost of lost revenue over 3 years is likely to be more.

As I also said earlier, yield is taken care of through restricting the number of seats by operating fewer flights.
 
FlyingElvii
Posts: 789
Joined: Wed Dec 27, 2017 10:53 pm

Re: IAG Post Covid Fleet Plan Summary

Mon May 11, 2020 5:50 am

a350lover wrote:
If the high Premium cabins are the ones more exposed to this lack of demand, I guess BA is the most exposed airline to this issue within the group.

Are there any figures of fleet reductions by airline?

The premium traffic is going to GA as much as possible, until this thing is over.
 
LJ
Posts: 5286
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Re: IAG Post Covid Fleet Plan Summary

Mon May 11, 2020 6:54 am

FlyingElvii wrote:
a350lover wrote:
If the high Premium cabins are the ones more exposed to this lack of demand, I guess BA is the most exposed airline to this issue within the group.

Are there any figures of fleet reductions by airline?

The premium traffic is going to GA as much as possible, until this thing is over.


Maybe in the US for the most senior members of staff (Board level). but I don't think this will happen in Europe (and especially not for those companies which received bail out money) considering the negative PR this will bring. Moreover, costs of an intercontinental flight with a private jet cannot be justified by many companies (US including) unless there is a real need for it.
 
chonetsao
Posts: 605
Joined: Sun Nov 06, 2005 3:55 pm

Re: IAG Post Covid Fleet Plan Summary

Mon May 11, 2020 9:16 am

F737NG wrote:
airzona11 wrote:
Airlines went bankrupt with the model of chasing capacity and ignoring yield. Airlines are not going to flood the market with seats. If they do go with denser cabins, they are going to reduce overall flights. That takes cash to reconfigure, so it will be for the long term if they do. In the near term they can fly reduced schedules.

Now if regulators force airlines to fly planes with empty seats for distancing, this is going to cause airlines to lose revenue and passengers to pay higher ticket prices. No one wins in that scenario.



Who said anything about flooding the market with seats? I only said to add more economy seats.

That will come at the expense of some premium seating, but not all.
It's unlikely that BA will come anywhere near filling all 56 J seats on a 77W or all 86 J on a 744 any time soon, so take out two rows of J (16 seats on both types) and replace them with 5 rows of Y (~50 and 45 seats respectively).

J seats only earn an airline 4x as much income as a Y seat when they are filled. As stated by concordeforever earlier, "2019 passenger levels are not expected to return until 2023."
In the aftermath of the GFC, my previous firm restricted travel to economy for flights < 8 hours until 2017. It wouldn't surprise me if type of company policy was replicated by lots of businesses.
So why carry the extra weight of J seating until sometime (maybe) in 2023 and choose to forgo the opportunity to fill the space with Y? Refitting cabins costs money, yes, but the opportunity cost of lost revenue over 3 years is likely to be more.

As I also said earlier, yield is taken care of through restricting the number of seats by operating fewer flights.


You are missing the point @arizona11 is making.

For instance, on BA's B777, if you take out one row of Business class seats, that is 8, and you will have to add 2 rows of economy class seats, which is 20. So every row of 8 business class seats would equal to 20 economy class seats. Do your math, if we use the CW NG configuration 48J24W203Y=275. Take out one row of J that would be 40J24W223Y=287 (4.4% increase overall and 9.9% increase in economy class). Take out 2 rows of J that would be 32J24W243Y=299 (8.7% increase overall and 19.7% increase in economy class).

Now you touched several unfortunately economic 101 for airlines:
1, When you are running out of cash, or burning cash at up to £20 million per month, you do not spend a minimum of £2 million per aircraft to do modifications.
2, There is a crisis going on, you want to conserve cash. Do whatever you want when you have a stead cash flow.
3, Even in 3 years time. the additional seats could not compensate the loss of premium revenue. 8 J seats can generate a minimum £10,000 revenue one way. 20Y seats at best £4000 one way. To match the 8J seats revenue one way flight, the 20Y seats has to generate £500 per one way flight. In 2019, you can fly LHR-NYC £299 return and LAX £499 return. I am not sure how you can come to conclusion that in 3 years, these 20Y seats can pay for the refit cost of £2 million itself.
4, If your aim is to sell more Y seats, you can always oversell the cabin as the normal practise, and then entice passengers to upgrade to premium cabin with upgrade offers in money or miles. BA had done this for years. No reason why it should not stop. In this way, you do not need to spend money to modify the cabin, you do not need to flood the market with more Y seats, and you still get more revenue by selling more seats and add the sugar on top with the upgrade fees.

And last, you said
yield is taken care of through restricting the number of seats by operating fewer flights
, unfortunately you did not see that this is already happening. The seats are reduced to minimum by so little flights available. BA will have a cash flow crisis soon. The way to survive is to firstly conserve cash, try to generate cash flow. And to improve yield in a soft demand environment, adding seats and capacity is the last thing an airline want to do. Sorry that you failed to see the reasons. No doubt BA will one day take out some J seats, but it won't happen until the market back to about 40-60% of what it used to be. Only then, BA would have the cash to do things it wants.
 
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F737NG
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Re: IAG Post Covid Fleet Plan Summary

Mon May 11, 2020 3:02 pm

chonetsao wrote:
You are missing the point @arizona11 is making.

For instance, on BA's B777, if you take out one row of Business class seats, that is 8, and you will have to add 2 rows of economy class seats, which is 20. So every row of 8 business class seats would equal to 20 economy class seats. Do your math, if we use the CW NG configuration 48J24W203Y=275. Take out one row of J that would be 40J24W223Y=287 (4.4% increase overall and 9.9% increase in economy class). Take out 2 rows of J that would be 32J24W243Y=299 (8.7% increase overall and 19.7% increase in economy class).

Now you touched several unfortunately economic 101 for airlines:
1, When you are running out of cash, or burning cash at up to £20 million per month, you do not spend a minimum of £2 million per aircraft to do modifications.
2, There is a crisis going on, you want to conserve cash. Do whatever you want when you have a stead cash flow.
3, Even in 3 years time. the additional seats could not compensate the loss of premium revenue. 8 J seats can generate a minimum £10,000 revenue one way. 20Y seats at best £4000 one way. To match the 8J seats revenue one way flight, the 20Y seats has to generate £500 per one way flight. In 2019, you can fly LHR-NYC £299 return and LAX £499 return. I am not sure how you can come to conclusion that in 3 years, these 20Y seats can pay for the refit cost of £2 million itself.
4, If your aim is to sell more Y seats, you can always oversell the cabin as the normal practise, and then entice passengers to upgrade to premium cabin with upgrade offers in money or miles. BA had done this for years. No reason why it should not stop. In this way, you do not need to spend money to modify the cabin, you do not need to flood the market with more Y seats, and you still get more revenue by selling more seats and add the sugar on top with the upgrade fees.

And last, you said
yield is taken care of through restricting the number of seats by operating fewer flights
, unfortunately you did not see that this is already happening. The seats are reduced to minimum by so little flights available. BA will have a cash flow crisis soon. The way to survive is to firstly conserve cash, try to generate cash flow. And to improve yield in a soft demand environment, adding seats and capacity is the last thing an airline want to do. Sorry that you failed to see the reasons. No doubt BA will one day take out some J seats, but it won't happen until the market back to about 40-60% of what it used to be. Only then, BA would have the cash to do things it wants.



Who are these supposed travellers filling J seats during a recession?
Company travel policies change during economic downturns. Very few sign-offs for travel in the first instance and certainly less likely to be in a premium cabin.

Your maths is fine, but your underlying premise isn't. You're assuming that the 6th row of 8 seats in J will be filled (that's business travellers #41 - #48) to generate that supposed £10,000 revenue each leg.
Without a vaccine being discovered - and who knows if one is going to become available - I think that row of J seats is going out empty each and every flight for the next 3 years, maybe longer.
Also, can BA really still charge anywhere near £1,250 per J pax per leg in this climate?

The next few months are going to be about getting seats filled no matter what, but as travel stabilises, continually upselling to fill premium seats will kill yield. A reshuffle of cabin seating will be necessary at BA and likely at IB.

As per the OP, my line of thinking matches what IAG has already stated:
"Fleet refurbishments are still going ahead but the mix of premium and non premium seats will very likely change both for new deliveries and refurbishment."

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