Trifter

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It’s amazing how the roller coaster world of the aviation industry never fails to surprise. The ludicrous losses, stupidly low fares, incompetent government fees and of course the burning competition.

        Currently, thousands of people are flocking to the least known airport in Paris of Le Bourget. Not only the enthusiasts, excited to see the latest models on display but more importantly the two titans of the manufacturing sector – Airbus and Boeing lock heads for the first time this year. Airbus the optimists and Boeing the pessimists. The former currently performing the best at the moment with well over 100 firm orders from across the globe, most surprisingly an order for 50 aircraft from Eastern European carrier Wizzair. Not the most stable economic region at the moment but it is now possible to see the end of this recession. BA boss Willie Walsh has said the worst is still to come yet ordering aircraft is not a next day operation – it takes time for delivery and to work their way out of the slump, they need to plan for the future. This is what Airbus and Boeing plus the smaller manufacturers are banking on and as the Far East market still holds strong, it looks like we may be able to hope that the makers will have a better year than expected.

        Looking at the passenger figures for UK airports is not the most encouraging view. Of all the major airports in the UK, only Belfast City and Birmingham fields have passed more people through their doors in May this year as they did last. Smaller terminals such as Blackpool and Norwich have been hit hardest as the economic climate takes it’s toll on the smallest airports. Is the airline revolution over? I think not. There is a slump across the board at the moment and to hold onto as many flights as possible is key at the moment which all airports should do. Larger facilities such as Manchester and Heathrow are not exempt from the fall. The most lucrative airport in the world, Heathrow, has seen numbers fall yet airlines have a problem – the BAA policy of ‘use it or lose it’s policy. This means every slot owned by airlines must be used almost all the time. To show you the extent to which airlines go to acquire these ‘golden tickets,’ the major US airline – Continental, paid over £100m for four slots. So what do the likes of BA and BMI who hold heavy numbers do when passenger numbers fall? Well they have to keep using them! Better to spend the £’000s to operate the flights empty or half full than lose the top slots currently estimated at £30m each. They are trapped in a money losing environment.

        This leads me onto BA, the main benefactor and victim of the crazy world of LHR. Currently holding 41% of all the movements in and out of the airport you can imagine the size of their operations. You will also recall the phrase: “The bigger they are, the harder they fall.” Nothing could fit more perfectly for BA. They have been setting the standard in the aviation industry for years and have built up on of the most lucrative networks on the planet from the platinum of all airports. 2008 saw a profit of just under £1bn yet the recent figures have revealed the loss of £401m. A fall of nearly £1.5bn. This has been caused by the falling pound sterling, falling passenger numbers, falling premium users – is there anything that isn’t falling?! Oh yes – the fuel prices which have also contributed to the astounding loss that was only estimated to be £150m in January. So what do we expect to happen to BA? Well I certainly wouldn’t think we will lose the tails anytime soon but major cut backs are being made. We have heard about the pension cuts and the salary reductions but what will be next? Cuts in service? Surely not. As long as BA keep their roots – their awarding winning service and world class cabins, they will survive and will thrive when we see a turn in the fortunes of the world economies.

        Airlines come airlines go, airports come and airports go (Coventry springs to mind!) but one thing that must remain for BA to keep it’s position is it’s tradition, it’s legacy – for the sake of Britain’s airline.