The Last All-Premium Airline May Vanish
Sunday, July 6th, 2008
The last of the transatlantic all-premium-class airlines could soon vanish, but not because of bankruptcy — and it’s not necessarily bad news for transatlantic high-fare fliers.
L’Avion, the French all-business-class airline that operates two Boeing 757s — each fitted with just 90 seats — between Paris Orly Airport and Newark Airport, has agreed to be purchased by British Airways.
Once BA and L’Avion obtain regulatory permission for the acquisition, BA intends to integrate L’Avion with British Airways’ new subsidiary OpenSkies. A source familiar with the deal says the airlines are hoping to be able to close the deal and begin integrating L’Avion and OpenSkies within the next month. Even before the L’Avion purchase was announced, OpenSkies and L’Avion already were operating a codeshare, with L’Avion selling seats on OpenSkies’ flights.
“L’Avion has built a fantastic business offering high-value premium service that has inspired tremendous customer loyalty on both sides of the Atlantic,” said Dale Moss, managing director of OpenSkies. “L’Avion will provide OpenSkies with immediate scale, increased access to Paris Orly and an experienced, talented employee base. This is a combination of two companies that are focused on bringing comfort and personalization to transatlantic travel.”
OpenSkies, which is almost but not quite an all-premium-class airline, launched daily flights between Paris Orly Airport and New York John F. Kennedy Airport on June 19. Like L’Avion, OpenSkies also operates Boeing 757s, which are fitted with even fewer seats than L’Avion’s jets — just 82, in three classes.
The new BA subsidiary’s 757s feature three cabins: its 24-seat Biz cabin, a business class service featuring what the airline says are the only fully lie-flat beds on the Paris-New York route; OpenSkies’28-seat Prem+ class, a new service category beyond other airlines’ premium-economy cabins that offers reclining seats with a 52-inch pitch; and economy class, featuring a cabin containing only 30 seats.
British Airways says the combined OpenSkies-L’Avion will operate up to three daily flights between Paris Orly and the New York area using the airlines’ existing Boeing 757s. The price of the L’Avion buy is Euros 68 million ($107.6 million), which covers the purchase of the airline and Euros 33 million ($52.2 million) of cash in its business.
Until BA completes its acquisition of L’Avion, the French airline will continue to operate its aircraft in their existing 90-seat configurations on its Orly-Newark schedule, which offers two flights a day, five days a week. L’Avion’s cabin features a 2×2 seat-row configuration with a wide central aisle Each seat reclines to 140 degrees, is separated from the seat in front by nearly 4 feet and is equipped with individual power supply.
BA has not said yet if it will reconfigure L’Avion’s aircraft to match OpenSkies’ three-class, 82-seat configuration, but it appears a likely move to ensure service consistency. However, BA has said its aim in integrating the two airlines is to offer customers benefits that will further improve the Paris-New York offering, including an increased schedule and BA Executive Club privileges.
L’Avion has flown more than 65,000 premium-class passengers since its start on Jan. 3, 2007. The airline has experienced steadily increasing load factors — the percentage of seats filled with revenue customers — since launch and has consistently outperformed its business plan objectives, according to BA.
This would make L’Avion unique among the recent batch of all-premium-class airlines that began service within the last three years, the other three — U.S. airlines MAXJet Airways and Eos Airlines and theUK’s Silverjet — all being forced into liquidation by insufficient loads and inability to raise additional capital as the U.S. credit squeeze tightened. Perhaps significantly, L’Avion is the only one of the four airlines that did not concentrate on the highly competitive U.S.-London premium-fare market.
OpenSkies came into being as the first airline created as a result of the new Open Skies agreement between the United States and the European Union, which allows airlines from either signatory jurisdiction to fly between any U.S. and any E.U. destination. The agreement came into effect on March 30, 2008.
Source — MSNBC