It’s a Europe-kind of week here on the blog, and today we’re talking about British Airways. (This post almost didn’t get finished since the fantastic World Series game 7 kept me glued to the TV last night, but I powered through.) British Airways is one of many airlines that has been closely watching Norwegian over the Atlantic, trying to figure out how to respond to its rapid growth. The time for watching, however, is over. British Airways is starting to drop the hammer.
This May, BA started a flight from New York/JFK to London/Gatwick. Yes, the airline had generally used Gatwick only for leisure routes (Vegas, Tampa, and Orlando in the US), so it was a bit strange. But it had flown Gatwick-JFK before and so it wasn’t entirely out of character. Since Norwegian had started it, I wasn’t surprised to see BA take a swing.
Then last week, BA announced 3 weekly (4 in the summer, which seems backwards) from Gatwick to Ft Lauderdale. Ok, not so weird on the surface, right? I mean, they already fly Orlando and Tampa to Gatwick. But then again, BA already has 2 daily from Miami just down the road in addition to joint venture partner American’s two daily there. Miami is also a major hub for American. So yeah, it’s a little strange, but again, Norwegian is there.
This week, however, came the strangest add of all. If there was ever any doubt that this was a strategy targeting Norwegian, that has been erased. There is no other reason why BA would begin flying four times a week from Gatwick to… Oakland.
BA already flies twice daily to SFO and has a new once daily flight to San Jose. So why the heck does it need an Oakland flight? Because Norwegian is there. Comparing the Oakland flight to the San Jose one explains a lot.
The San Jose flight is a true business route aimed at Silicon Valley. It’s operated by a 787-9 with 8 first, 42 business, 39 premium economy, and 127 coach seats for a total of only 216 seats. This route’s success is highly dependent upon how it sells in the premium cabins.
This, is of course, very different from how Norwegian operates. A Norwegian 787-9 has 35 premium economy and 309 coach seats for a total of 344 seats. Yeah, that’s 60 percent more seats than BA has on the same plane, so obviously, if BA wants to compete, it can’t use that airplane.
So, over in Oakland (and on the Ft Lauderdale and JFK routes as well), BA is using one of its 777-200ERs that’s configured for leisure travel. These airplanes are mostly 15+ years old and would probably be on their way out in favor of 787s if not for this particular leisure niche. The airplane has 48 business, 24 premium economy, and 203 in coach for a total of 275.
Of course, BA is hoping that it can attract travelers over Norwegian for several reasons. One is the fact that it has a true business class unlike Norwegian. The other will be frequent flier loyalty. But can it beat Norwegian at its own game?
I suppose it’s important to note that Norwegian doesn’t seem to be all that great at its own game in the first place. It certainly underperforms other low cost carriers in Europe, and long haul is believed to be a large part of that. On long haul flights, it’s much harder for low cost carriers to get a big cost advantage than on short haul. Aircraft configuration is a big driver, so BA is on the right track. But it probably needs to get a lot denser. Right now it only has 9 abreast in coach on those 777s. It could probably get this up to 300 seats if it went for 10 abreast.
But that may be a bit premature. After all, BA can use the dense-ish configurations it has to see if this experiment will work from a revenue perspective. If so, then it can turn up the pressure and tweak the model as needed.
I like that BA isn’t messing around with some silly airline-within-an-airline model here. Just sit on top of Norwegian with a good airplane and make them sweat. Fares will come down, so get ready for that piece of good news, Bay Area travelers. This will also open up new connecting opportunities on BA, especially to leisure spots in Southern Europe that BA only serves from Gatwick. Of course, that’s not the point of the service but it’s a nice benefit.
British Airways has to be hoping that this pressure will make Norwegian focus on European-US flights that bypass London. If that happens, then BA wins. I’m not so sure that this is going to work, but then again, BA can’t be sure either. But it has the airplanes and it needs to find a way to compete one way or another. I like the effort.
[Update 11/4: Now the other shoe has dropped. It was announced today that the BA 777s will now get fewer business class (48 -> 32), more prem econ (24 -> 48), and 10 abreast in coach adding more seats (203 -> 252). That’s 332 seats ready to fight Norwegian.]
[Original image via British Airways]