BAA stated that London Heathrow Airport has “no long-term future as a major hub airport” (The Sunday Times, 01-May-2011). The airport operator believes it can maintain Heathrow’s position as the world’s busiest international airport for 15 years “at the very best”, before the government’s refusal to increase runway capacity will result in growth moving to the competing hubs of Paris CDG, Frankfurt, Amsterdam and Madrid Barajas. London Heathrow fell to the fourth busiest airport in the world in 2010 from second in 2009, falling behind Beijing Capital and Chicago O'Hare.
BAA concedes: Heathrow is in decline
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Southwest Airlines:domestic changes, continued international expansion, as overall 2017 growth slows
Southwest Airlines plans lower system capacity growth in 2017. The company joins other US airlines working feverishly to return to positive unit revenue as oil prices and labour costs are forecast to rise for most of the country’s airlines.
Even as Southwest’s capacity increases are projected to fall year-on-year in 2017 the airline is broadening its international reach with the debut of new flights from Fort Lauderdale, and is making moves in its domestic network.
This includes its decision to launch service from Cincinnati, a market that has attracted significant low cost service during the past two to three years as its hub status for Delta has diminished. Southwest’s service entry at Cincinnati comes at the cost of flights from Akron and Dayton, which is not surprising, given Cincinnati’s potential to garner higher revenue.
Although Southwest cited some positive trends at the end of 2016, it struck a cautious tone about the operating environment in the US, noting that while yields were improving, the revenue environment remains challenging. US airlines, including Southwest, are being closely watched after declaring they will return to positive unit revenue in 1H2017.
Qantas' first 787 routes, Perth-London nonstop and Melbourne-LA, address urgent strategic needs
Qantas' first regular 787 services are a year away, but the airline is already announcing the initial routes so it can increase its proposition in deeply significant markets (and also begin preparations while avoiding possible media leaks). The well-flagged Perth-London nonstop service was announced first, but the first route to be flown will be Melbourne-Los Angeles from 15-Dec-2017.
Perth-London nonstop is less about the actual market between Perth and London (it is small) and more about Qantas connecting the rest of Australia with a one-stop proposition via an Australian port with an experience that Qantas can intimately control. Even with Qantas' successful restructuring and cost base reduction, it will still need to command a yield premium.
Nonstop to London, an unprofitable market not expected to turn to black in the short term, is also about the prestige and marketing value of being the only airline to operate Australia-Europe nonstop. Melbourne-LA was likely a late change, prompted by US rejection of its proposed JV with American Airlines. The JV would have resulted in American entering the Melbourne-LA market; Qantas' 787 will instead provide the necessary boost in presence of a market that has become more competitive.