Corporates at Canary Wharf have given the thumbs up to British Airways' London City-New York service due to commence service in September next year, reports Gill Upton.
Their two priorities are maximum sleep and breakfast, amenities the new service will have in abundance according to Richard Tams, head of corporate sales at the airline, who has canvassed opinion from potential customers.
The route, almost certainly via Shannon, will allow customs clearance at the Irish airport and will classify the service as a domestic arrival in the US.
There will be 40 minutes on the ground at Shannon, time enough to get everyone through customs and to refuel with the passengers on board, reckons Tams.
It will give passengers an extra hours' sleep on the way back. "We see that as a plus as timings on the route are part of the selling point," he says.
Two brand new Airbus A318 aircraft will service the route, configured with 32 lie-flat bed-seats; "a bespoke product" says Tams. All seats will be forward facing, unlike the "ying and yang" arrangement in Club World.
There will be two flights a day from the commencement of the service and a promise of a 15-minute check-in at London City, negating the need for extensive lounge facilities. "Our passengers don't want to hang around at airports," says Tams.
The airline is targeting the major banks that occupy the skyscrapers at Canary Wharf, such as Barclays and HSBC, already BA customers boasting big volumes of travellers.
Tams is confident that the stopover at Shannon will get the green light, but there is still no decision as to which of the three NY airports the new service will arrive at.
"JFK may seem the most obvious and we may end up there as we have our own terminal there, with the dining facilities, lounge and so on so it would make it easier." This decision is due in the next week. Pricing will be at a premium. "It's a top premium product and will command top premium prices,” says Tams.
The long lead time to the start of the service is partly due to having to purchase new aircraft and also to gain certification for the first use of the A318 at London City.
There have been concerns over using this aircraft on the short runway at London City.
With only two aircraft operating on the route, any technical problems will cause severe disruption. Tams says in such circumstances BA will use both Heathrow and Gatwick as back-up. Seats will go on sale at the end of 2008.
"We are serving a high density of business travellers and we are confident that we will be filling the service," says Tams. In the current credit crunch, Tams foresees corporates mixing the London City and Heathrow service to save money.
Before the London City service begins, BA will unveil another new product launch, the all-suite product for First class. The relaunch will commence early next year and be completed by early 2010.
What hangs over all future airline activity is, of course, the fuel price. The airline will announce capacity cutbacks in the next two weeks, centred around clever cuts in leisure routes spread across Gatwick and Heathrow so as not to lose valuable slots. "We are adamant not to compromise our business product and business traveller schedule," says Tams.
Talks with Iberia and American continue, in the hope of working together on price and scheduling, while Tams says the airline is "in a pretty good hedge position" for 2009, having hedged 73 per cent of its fuel needs at US$84 to cover the first half of 2009 and 58 per cent at US$88 for the second half. "But we're going to start paying closer to spot price so the price moving forward to the customer will go up," he warns. BA’s fuel bill has already increased by £1billion £3billion.
Price increases are likely to be through increases in fuel surcharges "as these are quicker to get to market rather than filing a new fare," explains Tams. "Plus we're not getting huge demand from corporates to deal with it any other way.
"The crisis facing airlines now is worse than 9/11, which was a short sharp shock. This is a prolonged state of affairs hampered by the underlying economic conditions that are very weak.
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In the midst of all this activity BA has added more resource to deal with smaller SME clients within corporate sales, trying to attract those companies who spend as little as £100,000 a year. Part of the offering is account management over the phone "to engage with many more smaller customers" says Tams. And from August, BA will be canvassing opinion from 500 corporate travel buyers and trade contacts to benchmark the quality of its account management. "We want to bring a new level of effectiveness and standards and we hope our customers have already noticed the difference. We want to be best in class."
In another push, BA is focussing on some 2,000 trade partners to act as ambassadors for T5 now that it's up to scratch, and to woo users from Scotland and the north of England, in particular, to use it as a single terminal transfer.
www.ba.com
