British airline passengers often don’t realise how lucky they are. The UK is the main hub for easyJet and Ryanair: Europe’s biggest budget airlines, offering wider horizons at lower fares than anywhere else in Europe. Jet2 and Virgin Atlantic have a well-earned reputation for excellent service. And that leaves British Airways with a huge challenge.
No other national carrier faces such intense competition on its own turf. Air France and Lufthansa face challenges from low-cost carriers, but not with the same intensity; and they can fight back with their own budget brands, Transavia and Eurowings respectively. On long-haul flights, all the European airlines are fighting to retain passengers against rivals to the west and, more particularly, Gulf and Asian carriers to the east. But only BA has a domestic competitor of the size and quality of Virgin Atlantic on all the most lucrative routes out of London Heathrow.
But British Airways has a superpower: the majority of slots at the world’s most sought-after international airport. BA’s portfolio of more than 50 percent of precious take-off and landing permissions comprises the most valuable intangible asset in aviation.
Passengers are prepared to pay a premium to fly to or from the UK’s main hub. Airlines say many travellers abroad believe Heathrow is London’s only airport, even though the capital is served by more airports than any other city.
Add BA’s Avios frequent flyer scheme – “as addictive as crack cocaine” according to one competitor – and there’s enough demand for British Airways to make £1.43bn in profit last year. Visualise that if the airline were making a profit at a rate of £50 a second.
Sometimes, however, that slot portfolio becomes a burden. If something goes wrong at Heathrow, the British Airways operation can fall apart with terrifying speed.
This became apparent this weekend. Storms battered south-east England for much of the day on Friday 6 September.
If there is a disruption at LHR, European airlines can easily cope: for Austrian Airlines, KLM and Swiss, flights at Heathrow represent only a small part of their total activities.
But if bad weather hits BA’s main base, it could affect 100 percent of flights. The airline is far more vulnerable to disruption at Heathrow than anyone else, as was evident on Friday, Saturday, Sunday and Monday. While British Airways grounded 265 flights, cancellations by other airlines were in the single digits.
EasyJet has a parallel vulnerability at Gatwick, where it is by far the largest airline. “Staff absences” in the control tower struck on Sunday night, leading to around 80 cancelled flights.
At Heathrow, many British Airways passengers were already on their way to the airport on Friday when the first wave of cancellations came in at around 7am. The airline has clever systems in place to quickly and automatically rebook passengers onto other BA flights – if there are seats available. Finding space is a growing problem; on average, only one in six seats left British Airways empty last year. So when the mass cancellations start, there won’t be enough seats to go around.
Some travellers were rebooked onto later flights, but these were cancelled due to the knock-on effect on the flight to Heathrow.
“When BA faces major disruptions, its short-haul schedule always falls apart more quickly and fatally than that of its rivals,” a senior aviation official said.
“It all has to do with the way it plans and organises its crew roster. You might see a plane arriving from Brussels, pilots arriving from Amsterdam and cabin crew arriving from Stockholm, all having to converge at Heathrow to operate an outbound flight to Barcelona.
“The permutations of things that can go wrong – and do go wrong – during periods of disruption multiply rapidly, beyond the point where this fragmented, Humpty Dumpty-style mess can no longer be pieced together.”
Add to that the complexity of restrictions on crew working hours and the effects can last for days.
So why not just keep more crew and planes in reserve? Well, even if you can find them at a time when planes and pilots are scarce, resilience is expensive. Keeping planes grounded just in case, when they could make money for the airline, is a significant opportunity cost.
An absurd ruling by the European Court of Justice stated that airlines must keep crew members on standby and provide coffee at every airport they serve. If that were the case, almost all aviation would be unviable. Airlines wisely ignored the ruling.
BA, like other airlines, is choosing the right level of backup: it is weighing up the costs of staffing and preparing aircraft to keep customers happy against the financial and reputational damage that comes when there is simply not enough slack in the system.
“We’re terribly short of pilots at Gatwick,” said one insider. BA’s counter-attack on easyJet is a Gatwick subsidiary, Euroflyer. But to deliver the promised schedule, British Airways has been buying capacity to keep the operation more or less on track.
Tony Wheeler, co-founder of Lonely Planet travel guides, was surprised to discover that his “BA” flight from Gatwick to Malaga was operated by “a company called Danish Air Transport using a 16-year-old Airbus previously owned by Sichuan Airlines”.
Chartering extra aircraft and crew is a normal part of an airline’s operation. But large-scale cancellations are not. Monday morning’s departure screens make for hard reading for British Airways passengers: 7:35am to Amsterdam, 7:45am to Verona, 7:45am to Alicante and 7:55am to Nice, all cancelled. At least some of the Alicante passengers may have found seats on the previous day’s departure flight, which eventually took off 17 hours late.
Even in relatively normal times, British Airways finds it difficult to stick to its schedule.
In 2023, on-time performance – the percentage of flights delayed by less than 15 minutes – was below 60 percent. Two out of five passengers were delayed by more than 15 minutes. BA’s sister airline, Iberia of Spain, scored 89 percent.
Partly because of British Airways’ poor timekeeping, BA earlier this year extended the “minimum connection time” at its Heathrow Terminal 5 hub from an hour to 75 minutes. By extending connections, the airline hoped fewer customers would be stranded or rebooked.
Continental competitors offer much smoother connections: to Vienna, for example, it takes 25 minutes to transfer passengers and their luggage.
British Airways, which currently takes three times as long, says it has “made significant investments to improve its on-time performance by 2024, which will deliver cost savings through greater productivity and efficiency”.
Stevie Ferguson is just one of many passengers who have so far been unimpressed: “Flied with British Airways last week,” he writes. “I had a connection via Heathrow. Absolutely awful. Five hours late. Luggage disappeared on the way back.”
Passengers don’t want to hear the lesson from last year’s excellent financial results: BA could continue to decline in service levels and still make a healthy profit.
Safety standards are non-negotiable, however. One reason British Airways continues to offer good fares is the trust of the travelling public that British Airways flies well. Keeping passengers and crew safe is an obsession. The last fatal accident involving BA was before many of its staff and passengers were born: a fire on the Manchester runway in August 1985, which killed 55 people.
Since the 1980s, expanding Heathrow by adding one or more runways has been on the agenda. But all efforts have come to nothing. The longer this inertia continues, the better for British Airways; its slot share would be diluted if Heathrow were to grow.
Scarcity is everything: those slots remain a license to make profits at a rate of £50 per second.
Happy days for British Airways shareholders, but not for all passengers.
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