NEW ROUTES
Commencing next April, American Airlines will launch services from New York, JFK to Budapest and Chicago to Helsinki, into the home markets of oneworld members Finnair and Malev. Iberia will operate Madrid to Los Angeles, whilst British Airways reinstates service to San Diego from London Heathrow, a market that has remained a strong O+D market, with over 80,000 passengers flying the sector between July 2009 and 2010 (IATA BSP data).
CAPTURING MARKET SHARE
The strategy of BA, Iberia and American would appear to be capture as much Transatlantic market share as possible as the market continues to rebound. The table below illustrates passenger share between Europe and the US by carrier
|
Airline |
Passenger Numbers (Two-Way) July 2009-July 2010 |
Market Share |
|
Delta Airlines |
5,989,689 |
13% |
|
British Airways |
4,834,027 |
10% |
|
United Airlines |
4,376,859 |
10% |
|
American Airlines |
3,916,864 |
9% |
|
Lufthansa |
3,504,610 |
8% |
|
Continental Airlines |
3,504,610 |
8% |
|
Virgin Atlantic |
3,048,056 |
7% |
|
Air France |
2,753,887 |
6% |
|
US Airways |
2,437,609 |
5% |
|
KLM |
2,377,541 |
5% |
|
Others |
8,919,425 |
19% |
|
Total |
46,060,100 |
100% |
Source IATA BSP data (Airport IS) July 2009-2010
PERFECT TIMING
With BA and American Airlines already having been granted anti-trust immunity, the three carriers will be able to pool together revenues and costs, and operate on the transatlantic market as one carrier. The JV comes at a time when airline consolidation and integration is happening across the world, LAN and TAM, AirTran and Southwest, United and Continental.
The JV will also permit the airlines to closely cooperate on marketing, scheduling and connectivity for new routes, and more importantly compete with its alliance competitors who already have such cooperation in place.
This move could not have come at a better time, particularly for British Airways. With the improvement in financial performance of the first class cabin, the JV will allow BA to enter markets that previously it could not operate.
Associated to this, is the improvement of their frequent flyer programmes, which is of importance to the corporate traveller. BA has decided to award 100% mileage on all fares increasing award points and thus allowing increased mile burn in BA leisure markets.
With BA increasing its leisure options, with new routes to San Juan Puerto Rico, and Cancun, corporate travellers will be attracted back to BA with increased mileage award and more destinations to use their mileage.
STAR AND SKYTEAM WATCHING CLOSELY
With four new routes announced and more set to follow, Star Alliance and SkyTeam will realise that this is potentially a game changing event
SkyTeam has the strength of a unified Delta, following the integration of the Northwest network, complementing the KLM and Air France networks, whilst Star Alliance has three US majors in its portfolio, United Airlines and Continental, which are set to integrate in 2011, as well as US Airways with Lufthansa offering European presence.
Related Content
