BA planning to increase capacity on Riyadh route
Published: Aug 19, 2010 23:28 Updated: Aug 19, 2010 23:28
JEDDAH: British Airways (BA) has said that it is pursuing its multi-billion-pound investment plan in acquiring new aircraft and also expanding its network of operations, with an increase in the frequency on the Riyadh route.
“We are pleased with the performance of services out of Jeddah and are increasing the frequency on the Riyadh route, but we have no plans to add any additional services into Saudi Arabia at this point,” British Airways’ CEO Willie Walsh told a telephone conference of GCC media representatives from the airlines’ London headquarterson Monday. Participating in the round table were Saudi Arabia, the UAE, Bahrain and Kuwait.
BA is investing billions of pounds in fleet renewal and expansion over the next few years. Aside from a 100 million pound investment program in upgrading its First class cabin on BA aircraft, a lot of investment is going into new aircraft and upgrading existing aircraft. “Our main focus for investment at the moment is in the area of new aircraft. We have a number of new aircraft being delivered to us this year including the Boeing 777-300s, and we will take delivery of more 777s next year. In 2012, we start taking delivery of the Boeing 787s and in 2013 the delivery of the Airbus A380,” he said.
Since taking charge at BA in October 2005, Walsh guided the company to the achievement of its “first-ever” 10 percent operating margin in 2007-08. He has taken the company to the brink of full merger with Iberia and introduced permanent changes across the airline to bring it through the worst recession in aviation history in 2008-09.
“We are also investing in upgrading the cabins on board our aircraft. We are putting a new ‘FIRST’ cabin on most of our long-haul aircraft and that will continue over the next 12-18 months. That’s a 100 million pound investment program in upgrading the First Class cabin on BA aircraft.”
Asked whether it is a good idea to invest in new aircraft or upgrade First cabin Walsh said: “Investing in new aircraft is definitely a good idea because the new aircraft are so much more fuel efficient than the aircraft they are replacing. That is particularly apparent in the case of the large twin engined aircraft, where the 777-300 in our configuration will have almost exactly the same number of seats as the Boeing 747-400, but the aircraft is significantly more fuel-efficient. Given the way oil prices are increasing, we believe investing in new fuel-efficient aircraft is absolutely the right thing to do.”
“We believe that continuing to invest in our premium products is absolutely right, particularly on long-haul, because we believe that the demand for that product will always be strong. We did see demand decline in 2009, but that was a cyclical decline on the back of the weakening economic environment. We have seen a strong recovery in long-haul premium demand in 2010 and I think that it is absolutely right for us to invest in that product.”
The way Qatar is investing significantly in developing a hub and airport network shows it clearly has ambitions to be a strong player in the global hub environment, in the same way as Emirates has in Dubai and Etihad has in Abu Dhabi. “Kuwait is a strong market in its own right and I think it is very strong in terms of the regional Middle East market, but I don’t think there has been any significant effort to develop a hub airport in the same way other destinations have been developed in the last five years,” he added.
Referring to BA’s global ambitions, Walsh said the carrier had received approval from the United States and European regulators to create a joint business with American Airlines and Iberia on the transatlantic routes. “We believe that this is a very important development in terms of competition, because it will allow the Oneworld alliance to compete much more effectively with the other two alliances of Star and SkyTeam on the transatlantic routes. It’s taken quite a long time to get the regulatory approval to do this, but now that we have it we are very excited about the prospect, and we are looking forward to having that agreement in place within the next couple of months. It will clearly give our passengers new opportunities because we will be able to offer a much greater network than we have been able to offer previously. I think it will give Oneworld an opportunity to compete in the US market in a much stronger way than we have been able to to-date.”
This will have a positive impact on the Middle East, Walsh said. “There will be some benefit for Middle East travelers transiting over the European hubs and particularly over Heathrow, because they will be able to access the improved network that will be offered from there. But the main focus will be on customers from the EU to US and vice versa. Given that the Middle East traveler also accesses that network from Heathrow, there will be some benefit, but the most tangible evidence of benefit will be to the passengers in the EU or US.”
Asked whether BA is looking at Middle Eastern carriers as part of its consolidation process, Walsh said. “We haven’t had any discussions but it is clear that the Middle East is an area we are looking at and an important market, and one that globally will be an important market for the future.”
