Tuesday, May 26, 2009

BA's Tres Chic First-Class Seats in Jeapordy

British Airways is sorely pining the departure of their premium passengers who once filled its forward cabin seats with the greatest of ease. BA, more than any other major European airline, relied on first and business class passengers for more than 50 percent of its revenues.

The slump in luxurious travel helped push BA into its “worst-ever loss of £401m, (and BA) has removed first class accommodation from four of its new long-haul planes, and is to review seating plans for other new aircraft,” the Guardian reports on its hometown airline.

A sign of the times? To be sure. Conspicuous consumption is out – austerity is in. And so it is, with premium seats sitting vacant, along with other industry challenges with reduced business travel, Willie Walsh, BA's chief executive announced he will work for no pay in July. Big deal? “"This is no stunt. I do not easily give up anything I have earned," he said.

Badly injured by the banking crisis, BA lost 13 percent of its lucrative premium bookings over the past six months for north Atlantic routes. Other airlines have fared just as bad with premium travel decreasing by almost 20 percent across the board. The International Air Transport Association anticipates business class to recover once global trade recovers, but the long term prognosis for bankers again flying in flocks across the pond is pessimistic. The banker boom that funded much of BA’s coffers is over.

British Airways will not be changing its name to Bankers Airline anytime soon.
Walsh admitted that the cost of ripping out seats in the existing fleet is too great to get rid of first class in existing planes, leading industry watchers to speculate that upgrades for economy class travellers might become a more common occurrence. "In the short term we would have to spend money to do it and that's not necessary," said Walsh.

The cost of refitting an aircraft, at millions of pounds per plane, means that airlines will have to turn to riskier strategies such as overbooking flights until their new aircraft orders arrive. Airlines can guarantee strong revenues from economy class passengers if they overbook the back of the plane. Under that scenario, any passenger who is the victim of an overbooking could be upgraded to one of the many empty seats in business class, or bumped to another flight. The Guardian

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