Monday, January 7, 2008

The Battle for the Atlantic

The news that United Airlines are spending $165m on their business-class and first-class cabin refurbishment that will include 15in flat-screen televisions, lie-flat beds, and the capability to use iPods with the on-board entertainment system is going to bring about some deep thinking in the boardrooms of their rivals and none more so than Silverjet and EOS. While this upgrade has been a long time coming it will also mean that British Airways and Virgin Atlantic, who have long enjoyed a critical advantage over the American carriers' offerings for transatlantic premium passengers, will also have to look to their own products. The fact is the both UK airlines derive considerable profits from their transatlantic first and business class cabins and so it's bound to get bloody.


Anonymous said...

All competition is good, keeps everyone on their toes. But I doubt Eos and Silverjet have too much to worry about. Their business is all about repeat customers and flyers who try all-business-class invariably like it, it's so much smoother in many ways, not just in the air but on the ground where the airline is handling many fewer passengers and can provide a real standard of personal service. It helps that they fly from less congested airports too, Eos from Stansted and Silverjet from Luton. The problem with many big airlines is not just the service they can provide but the places they provide it, like Heathrow which is nobody's favorite airport.

Richard Havers said...

Anon, your points are well made. But I definitely think that BA will see an upswing with Terminal 5. Added to which one of the problems in business travel is when the corporate deal machine kicks in. If corporations do a deal with an airline for ALL their corporate travel then it can prove to be tricky. It's not that EOS and Silverjet can't do deals it's just that their yield declines.

Watch out for pressure on fares in a tightening economy.