Talking to British Airways About the A380, the AA/US Merger, and More (Across the Aisle)

I had the chance to catch up with Simon Talling-Smith, the Executive VP of the Americas for British Airways, on the day that BA announced its first A380 routes from London to LA followed by London to Hong Kong. We had a good discussion about that and more, including the American/US Airways merger. Here’s yet another Across the Aisle interview…

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Cranky: Let’s start with the news of the day. I just saw that on October 15, the A380 starts, right? I’m really curious about this one. There aren’t a lot of airlines that have a use for the A380 but with Heathrow being as constrained as it is, and with the chance of the UK government doing anything about it pretty slim, you do have a good use for it. I’m curious how you decided to start with Los Angeles?

Simon Talling-Smith: I think the 380 is really well-suited for long, high-volume routes where you’ve got a lot of traffic, where you’ve already got large aircraft flying 08_02_01 acrosstheaislebaon that route, like the 747s, and you’ve got big premium demand. A big part of British Airways is about the many, many customers who travel with us in First and Business. If you think about this airplane, it’s got 110 or so seats in First and Business. That’s a lot of premium lift, so a route like LA is perfect. It has very strong demand in the obvious areas, like entertainment, etc.

Cranky: What’s the breakdown? How many seats are in First and Business?
Simon: We’ve got 14 in First and 97 in Business
Cranky: And then I assume a decently-sized World Traveller Plus [premium economy] cabin?
Simon: Yep, 55 in World Traveller Plus and then 303 in World Traveler [coach]

Cranky: So if you’re going to be flying on the A380, are you going to notice a difference vs, say, the 777-300?

Simon: We’ve only just relaunched a lot of our seat designs for the -300, so you’ll notice a lot of similarities. But the 380 itself is a pretty amazing plane. I think when you fly on those planes you feel that extra space, and you feel how quiet they are. It makes a big difference when you’re in the air.

Cranky: I guess if you’re in Club [Business Class], you have this new kind of 3 seat section in the center?

Simon: Yeah, exactly. And that’s going to be a very private space. You find people go into Business have different tendencies whether they want more open seats or more private seats. If you want more privacy, that middle seat will be great.

Cranky: It’s on the upper deck right? Is that the entire upper deck?

Simon: No, we actually are a bit different. We are continuing to have the premium cabins in the front of the aircraft on both decks. One of the reasons is that it means everyone in a premium seat is close to the door getting on and off. I’ve seen people on some of our competitors at the back of the upper deck; it takes them a long time to get off. So we have First Class at the front of the main deck and then Business behind. Then on the upper deck, the first half is Business as well.

Cranky: So when that comes to LA, are you going to continue to have the same number of frequencies? If so, are the other 2 going to continue to be 747s?

Simon: We haven’t announced what we’re going to do in future seasons. I can imagine over time it will evolve, but to begin with, it will just replace one of our existing 747s.

Cranky: We now know the A380 is a fairly similar experience to the 777-300. Do you know when the 787 comes if that will have a similar onboard experience?

Simon: Again we’re not at this point making any announcements so we have to remember that those two aircraft are very different in size and shape and so your ability to use that space is obviously quite different. They’ll be serving different kinds of routes as well. My guess is it will be based on our 777-300 suite of products but you can expect some tweaks to make it appropriate for that size aircraft.

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Cranky: The other big news is the American/US Airways merger. I know publicly BA has been supportive; how are you viewing this as an airline?

Simon: We think it’s good news. American are a key partner in oneworld and in particular with our joint business, we’re very close to them now. We’ve been in joint business for over 2 years, and anything that makes one of our partners stronger is a good thing, so we’re very supportive of that.

Cranky: I assume you’ve been actively engaging. I realize the merger isn’t done so there’s nothing to do, but you have to at least be running scenarios about route shifts and where you might expand?

Simon: Yeah, I think really so far this has been largely a conversation that American has been having with US Airways. They’ve been extremely good at keeping us up to date. Obviously there are competitive restrictions around what kind of discussions we could have about what it would look like in the future, but for now US Airways is still a competitor.

Cranky: But you can talk to American about it.
Simon: Yeah, we can do, but it’s not a big activity at the moment.

Cranky: It should give you some more opportunity, more feed in the US.
Simon: Yeah, exactly. US Airways brings a great network addition to American. It brings more transatlantic routes.

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Cranky: Over in Europe, Virgin Atlantic just brought out Little Red flying domestic routes. I know this is Europe and not North America, but is there any sort of response to that?

Simon: Well we’re used to competing vigorously on those UK domestic routes. We’ve got a number of different airlines that fly around the UK and the addition of a new competitor is never a bad thing. We have a lot of experience and we’ve got a great product, we’ve got very good schedules, and we know what those customers want so we’re confident about competing with a new entrant.

Cranky: How has the European business been doing in general? There’s been a lot of struggle, not specifically with BA, but a lot of airlines “transforming” and “restructuring” and coming up with all sorts of silly names to try to fix things. So how are you doing?

Simon: I think it’s a great example of a very competitive business that’s always driving us to create new products, try new pricing structures. So for example we just introduced a hand baggage-only price on European routes out of Gatwick. It’s an example of how products and services are evolving in Europe.

Cranky: Is there a reason it’s just Gatwick? I know Gatwick is more leisure but there are some cities you serve from both airports. Was this just an easy way to test it? Or is it just that people view Gatwick as a low fare airport?

Simon: I think Gatwick is a great opportunity to try new products for customers and see how they like them, see how easy it is to make them work. It’s the right size to do that and it’s by no means impossible that products get repeated elsewhere in our network.

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Cranky: Now, how about with Iberia? They’ve certainly been going through quite a bit of turmoil. It’s a tough transition getting it to a point where it’s going to be a good and profitable member of the group, but are you seeing good traffic flows? Is there still tremendous value on the BA side?

Simon: Yeah, I don’t want to go too much into traffic but what I see in the US is that our customers here like the fact that we give them better choices on routes into Europe, not just Spain and the UK. Now the combination of flying we have to a city like Paris makes the number of choices significantly greater. So for customers traveling across the Atlantic, adding Iberia is a great thing for us.

Cranky: Do you get any pushback from your customers about this? Because for the most part, you have a vastly superior product in comparable cabins. American is now taking 777-300s for a more competitive product and Iberia has plans as well, but do you find people saying, “hey I’m used to flat beds in Business or audio/video on demand and i’m not getting that”?

Simon: I think what you find is that customers are pretty savvy at choosing the way they want to get to the place they want to get to. They understand different times, frequencies, different products, and quite often those have different prices. So people choose what’s right for them. Sometimes that means flat bed products and sometimes it doesn’t, though if you look at Iberia they’re just upgrading their Airbus fleet. Same at American – the world is moving in the direction of proper flat beds.

Cranky: It’s more of a temporary issue I suppose, but I was wondering if you got pushback.

Simon: We haven’t had any pushback and what we do see is that more customers within our frequent flier programs are trying out American and Iberia and vice versa.


11 Responses to Talking to British Airways About the A380, the AA/US Merger, and More (Across the Aisle)

  1. SEAN says:

    Interesting…in the early days of code sharing, BA & US joined forses. However when BA wanted a new partner in AA some years later, the divorce was pritty uggly. Now US & BA will be getting back together all be it via AA.

  2. Jorg says:

    Funny to see how Simon tries to talk around the huge difference in experience between Iberia and BA. I’ve flown both long haul and I would do absolutely everything to avoid being on Iberia again.

    BA has AVOD and a lovely crew: funny, attentative, they really give you the feeling they’re happy you’re on board.
    Then there’s Iberia: old school CRT displays throughout the plane (only positive thing: the tail camera that’s on during taxi and take off/landing) and the crew seems to be excited only when they get rid of you after arriving.

    There’s still a HUGE way to go for BA and Iberia to be even remotely comparable. I know Alitalia is seen as the worst airline in the world, but honestly I’ve enjoyed myself on their flights. Iberia: not one single flight I’ve taken was acceptable.

    • Jared says:

      Agree with you here. I have flown BA several times and it is nice for a coach product. Iberia was terrible. Both domestic and MAD-LAX were oversold to the point where they issued multiple tickets with the same seat so they had to take passengers off the plan (not fun to watch). The food was mediocre, not really any valid entertainment and the interior is a flashback to 1975. It makes the planes look SUPER old, even though they are not really.

  3. Should be interesting to see how the 380 does LAX-LHR. Maybe big named celebs won’t want to be on an airplane with so many people who can disturb them or want 400+ cell phone cams taking photos of them.

    When BA teamed up with IB there was many carriers left in Europe they could team up with. IB is at least from a large country in the southern part of Europe so it does give different through service routes then BA can give via the northern part of Europe and isn’t so constricted. If BA can get IB to better themselves service-wise it could make for a better match.

  4. Eric says:

    I thought about that irony too Sean…but that US is dead and buried. That management regime is long gone.

    Talling-Smith does a good job at evading Cranky’s direct question about the IB albatross. IMHO this is one of those things that looked great on paper but messy in practice. The Euro northern/southern, North America/South America split and leveraging cultural ties strategy could prove successful. But it is going to take a major capital investment in product and painful reinvention of the wheel at Iberia.

    • SEAN says:

      @ Eric, Oh I know, but I saw it through a unique lens. Imagine you and your wife go into business together. After several years you both get divorced & she takes the business. Meanwhile you start a company on your own & are successful at it. After several years your ex-wife decides to merge her company with yours & as a result, the two of you end up working together once again despite not being maried.

  5. Jared says:

    My thought here is that BA will soon be flying the A380 between Los Angeles and London and then AA will start 777-300ER soon as well. That is a lot more capacity. Wonder how that factors in?

  6. Daren S says:

    Some great questions and interesting responses. The BA/Iberia on-board product deficit issue is big, though he is right that they are using pricing as a way to get around this. I’ve been planning a trip to Brazil and using BA miles you can get into business on Iberia almost for what one would expect to pay for Traveller Plus. I am well aware that the IB business product is vastly inferior to BA’s but I would still get a bigger seat than in Traveller Plus so it seems enticing. The recent IAG 2012 results do show that there is a long road ahead of the group to get Iberia into shape. The militant unions will make this transition far more difficult.

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  8. Dear Cranky:
    I’d like to see you write an article about BA’s egregious bureaucracy. We’ve had run-ins with them twice over the last 5 years and will never, ever book with them again. My husband holds a Kenyan passport and is a permanent resident in the U.S. He has been unable to transit through Heathrow twice because of England’s ever-changing security rules – yet he can fly anywhere else in the world. With next to no information available on the UK border security website (which is awful) and the refusal of the British consulate to answer questions via phone or in person – they stop you downstairs and send you home with a form, then BA should extend the courtesy of rebooking tickets, even if purchased through a travel agency. Our choices were paying $2,500 for a ticket (the only comparable one the agency had) a month later, in addition to an $80 transit visa, or asking for a refund. My position? If the British could steal all the best land in Kenya and hand it out to their feckless aristocrats, then my husband (who has been vetted thoroughly by Homeland Security) should be able to transit through Heathrow for an hour and a half – and if he must be constantly reminded of his third-class status in a world still riven by structural racism, he certainly should not be forced to pay penalties by an unresponsive airline with outdated policies. BA would not even TALK to us about rebooking. We called 3 or 4 times and everyone we spoke to was unyielding AND arrogant. Never. Ever. Again.

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