OpenSkies Gets Ready To Fly

May 12th, 2008

In a few short weeks time, the first fare paying passengers will be stepping on board a unique and historic platform.

Not that its just a Boeing 757-200, rather this airplane, its crew and passengers will usher in the first true airline to be born from the recently EU-US implemented Open Skies deal. The British Airways offshoot, aptly named OpenSkies itself, will operate initially between New York’s John F. Kennedy International Airport and Paris Orly Airport.

Equipped with 24 Biz seats, 28 Prem+ seats and 30 Econ seats, OpenSkies is from the outset marking its territory in the skies with a radical masterplan.

Its parent, British Airways, was kind enough to offer its thoughts behind the airline and how it aims to make OpenSkies a success from the outset.

• With OpenSkies ready to take to the air for the first time this summer, does the airline envisage operating to other key hubs such as London Heathrow or Gatwick, given the recent EU-US Open Skies deal to further liberalise air transport services across these two continents?

The raison d’être behind OpenSkies was to capitalize on the strength of our brand and our product in the US to make inroads into new markets for us in Europe. So we have a vision to start services to other key European cities but services between the UK and the US will continue to be operated by the main British Airways operation.

• Although in its infancy, we have seen a raft of small, premium airlines such as MAXJet and Eos Airlines collapse - what strategy will OpenSkies employ to ensure that it maintains both market share and profitability in an industry where fuel costs are rising faster than at any time before?

We believe that there is a demand for a BA endorsed airline operating between continental Europe and the US and by offering a multi cabin airline, we are not confining ourselves to a particular part of the market. OpenSkies plans to expand its network between major business centres in the EU and the US and increase its schedule on its route network.

Maxjet and Eos both operated between London and New York, which is one of the most fiercely competitive routes in the world. This contrasts markedly with the city pairs on which OpenSkies is likely to operate, where there are fewer carriers and a lower level of frequencies.

For example, there are around five times more seats available between London and New York as there are between Frankfurt or Paris and New York. But there is strong competition throughout the aviation industry and clearly, OpenSkies will need to maintain tight control of its cost base. Even with fuel prices at this level, OpenSkies has a viable business plan. OpenSkies will also benefit from being able to utilize the BA infrastructure for many functions, such as sales and distribution as well as corporate ‘head office’ type functions.

Image courtesy of British Airways/OpenSkies

• The press/media has been instrumental in highlighting green issues for aviation. How will OpenSkies tackle these challenges given that it will be operating 757’s, regarded now as a much older narrowbody jet compared to other airplanes? Has the airline made any decision on a new fleet rather than use existing mainline British Airways airplanes?

British Airways can trace its environmental focus back to 1990 and was the first airline to publish an annual environmental report, in 1991. The 757s will be retro-fitted with winglets, which improve fuel efficiency, reduce the aircraft’s CO2 emissions and increase the aircraft’s operating range. The environmental performance of OpenSkies will be comparable with airlines such as Eos and Silverjet. Given that OpenSkies is still very much in its start-up phase, it is too early to talk of replacing the current 757 operation with new aircraft of its own.

• The EU-US Open Skies deal is still young - there is always a possibility that legacy carriers on both sides of the Atlantic may emulate British Airways’ move with OpenSkies. Do you think that OpenSkies being first into this newly opened marketplace will give the airline an edge over other potential newcomers?

It is always possible that other carriers will seek to replicate OpenSkies but we’ve always welcomed competition. Being the first mover in any market has the advantage of stealing the march on the market, but being second or third into the market has the advantage of learning from the experience of those that have gone before.

• If the second phase of the EU-US Open Skies deal is not ratified, how much of a problem will that be for OpenSkies?

OpenSkies can operate within the provisions of the first phase of EU-US Open Skies and we remain hopeful that real progress will be made towards a full Open Aviation Area in the US by 2010.

• Would you agree that European airlines benefit less overall in the Open Skies deal, since they cannot increase ownership in US carriers, nor can they pick up and fly passengers from within two points within the US? (US carriers can I believe, pick up EU passengers and fly anywhere intra-Europe).

British Airways has long argued that the first phase of Open Skies provided more benefit for the US than for Europe and argued that the primary bargaining chip – access to Heathrow – should not be surrendered until the US had signed up for a genuine, even-handed liberalization.

• Would OpenSkies ever entertain the prospect of a deeper alliance with American Airlines’ own US domestic operations?

The current focus is firmly on OpenSkies’ start-up plans.

• Longer term, will OpenSkies look to operate into the EU from other key hubs within the USA? If so, which hubs are attractive and which destinations in Europe stand out for you?

Other cities in Europe being considered include Amsterdam, Brussels, Frankfurt, Madrid, and Milan. Other US destinations could be considered in due course.

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