Interesting insight from Willie Walsh today into the possible future of BA’s operations at Gatwick airport, as he indicated the days of it operating two-class cabins on short-haul flights from the airport could be numbered.
After BA posted first half losses today, the carrier reiterated its belief there were structural changes taking place in the industry, particularly relevent to its short-haul premium business where yields have been hard hit. Asked during a conference call with analysts today about the long-term future for premium in short-haul, Walsh outlined the robust future role he envisages at Heathrow.
“We believe we can continue to justify two-class service at Heathrow for some considerable time. Ten years from now I would expect we will still be operating a two-class service at Heathrow,” he says. ”I think the nature of the change we’ve seen primarily relates to point-to-point short-haul premium. I think that is structural. We see that where the short-haul leg is part of a combined short-haul/long-haul product, there is still demand for that product. So even with the most pessimistic outlook on this, we still believe this is a viable proposition for us, though it will be at a lower level and so the revenue stream will reduce, so we need to say a structural change.”
But he acknowledges Gatwick provides a different challenge.“I’m not convinced we can continue to provide it at Gatwick, because I think the demand at Gatwick is very different to the demand at Heathrow. We don’t get as much transfer from short-haul to long-haul, so I think its probably a question of time, and sooner rather than later that we would address the issue of potentially moving to a single cabin configuration for short-haul at Gatwick.”
Talking of Gatwick, Walsh said he had already spoken to the new owners of the south London airport. “I still see Gatwick as an opportunity for us,” he says. “We’ve head early discussions with the new owners. We see the change of ownership as an opportunity,” he says, noting this was not a criticism of previous management, but his believe Gatwick would benefit from more focused management.