- Passenger traffic (RPMs): +2.7% year-on-year;
- Load factor: 81.9%, +1.7 ppt.
Delta Air Lines reports 3% rise in Asia Pacific pax traffic in Feb-2010
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All-premium UK-US airlines. BA cuts LCY frequency; La Compagnie quits LTN; Odyssey to launch in 2017
There have been two notable recent developments in the market for all-business class services on the North Atlantic: British Airways is to reduce its London City-JFK A318 frequencies and France's La Compagnie is to withdraw from Luton-Newark to concentrate its 74-seat Boeing 757 operations on Paris-Newark (its only other route).
BA's 32-seat London City operation has been suffering from significant load factor declines, particularly on the outbound flights. These flights make a refuelling stop in Shannon, where passengers can pre-clear US customs, but this may not be a sufficient incentive for some passengers to take an indirect flight. La Compagnie expressed concerns about uncertainties in the UK post-Brexit, but its route economics must anyway have been struggling, due to Luton's lack of suitability as a premium market and its lack of feed.
So far there has been no reaction to these developments from the new-start Odyssey Airlines, which plans to launch an all-business class London City-New York service in 2017. It will no doubt be attempting to find a balance between relief that its level of competition has reduced, and some anxiety that its launch may coincide with a softening of market demand.
Aeromexico and Delta JV: major uncertainty reigns after the DoT hits hard with slot divestitures
A transborder joint venture between SkyTeam partners Aeromexico and Delta is hanging in the balance now that the US DoT has required slot divestitures and other stipulations in order for the airlines to move forward with their proposed business agreement. Not surprisingly, Aeromexico and Delta believe limitations proposed by US regulators would diminish the economic benefits of the joint venture, and are warning they are reconsidering deepening their business ties.
Numerous airlines expressed concerns about Aeromexico and Delta’s concentration of slots at Mexico City Juarez, and the DoT responded by requiring slot divestitures at the airport along with the relinquishment of slots at New York JFK. The airlines have countered that the DoT’s analysis is flawed, and that a smaller number of slot divestitures at Juarez required by Mexico’s government should allay any concerns expressed by competitors. Aeromexico and Delta also argue another stipulation imposed by US regulators – limiting the joint venture to a five-year term – would create too much uncertainty for the viability of the business venture.
Delta’s plans to take its stake in Aeromexico up to 49% was contingent on the JV proposal succeeding. But with the stipulations imposed by DoT in order for the partners to establish their joint venture a dark cloud of uncertainty is hovering over Aeromexico’s future ownership structure.