BA By A Long Shot

Thursday September 27, 2007. Just gone past 7am and we get the news of the most widely anticipated order of 2007.

All that remains is for Emirates to “upstage” the event at the Dubai Air Show in several weeks from now.

British Airways finally announced it’s long awaited long haul airplane fleet replacement order comprising Boeing 787-8’s and 787-9’s along with Airbus A380-800’s.

Image courtesy of Flight Global.com

Many in the industry regard Mr. Walsh an “Airbus Man”, and the A380 order will now be their ammunition to this belief.

In reality, Walsh had a tough time convincing the Board that the airplane was needed. With the move to Terminal 5 some 6 short months away, Walsh has succeeded in not only getting the big Airbus jet to maximise the efficiency of the new terminal, but he has stuck with the BA philosophy for frequencies with the 787.

Image Courtesy Of Flight Global.com

As I’ve said previously, the future of long haul travel will be decided between who does and who doesn’t operate the 787 family - the BA decision to select the -8 and -9 is one that is of little surprise.

Invariably, people will question the prospects of the 747-8I even more. I’ll go back to the point that while confidence in the model exists, while the 747-8F continues to sell, the chances of a 747-8I sale will not diminish anytime soon. Of course, I fully expect the plethora of detractors to state otherwise - but also today, Bloomberg reports that the costs for the Airbus A380 have swelled to $18bn.

Image courtesy of Flight Global.com

I wonder what the Boeing critics will make of the breakeven number on that airplane? After almost 3 years without a customer, Airbus has secured a big name - but also at a big price. In the coming days, we’ll likely learn just how far down Airbus executives pants were to secure this stunning loss-lead deal.

In the press release, Walsh identifies a few key issues:

“These aircraft set the gold standard when it comes to environmental performance in the key areas of CO2 emissions, local air quality and noise. They will contribute significantly to our target of improving fuel efficiency by 25 per cent between 2005 and 2025.

“They are also much quieter than their predecessors, which is of vital importance at Heathrow. Both the A380 and B787 are rated as producing a quarter of the noise level of the B747-400.

“These new aircraft will continue our commitment to deliver the best travel experience to our customers. This order builds upon our recent investment in improving the customer experience through Terminal 5, the new Club World cabin, inflight entertainment system and ba.com.”

The new aircraft types will enable the airline to strengthen further its network strategy, complementing each other in the longhaul fleet. The A380 will be used to provide more capacity for the airline’s key high-density markets and maximise use of scarce Heathrow slots. The B787 will be used to start new routes and increase frequencies in existing markets.

Given that Walsh and other BA CEO’s have all been advocates of expansion at London Heathrow Airport, this dual strategy of size and frequency is one BA needs to counter other A380 operators into the airport - most notably Emirates.

While the younger 747-400’s in the fleet will soldier on for a decade or more, it’s premature to completely discount the 747-8I just yet. Between it’s A380’s and 777-200ER’s, there is a huge void that needs to be filled. The 777-300ER and A350XWB may also feature.

While today’s order may come as a surprise or anti-climax (depending on your view), what’s important is that British Airways’ appetite for new airplanes has only just begun.

By any means, it’s not over by a long shot.

11 comments September 27th, 2007