COMMENT: British Airways and the Franchises
British Airways has now launched BA Connect. It is a fully 100% owned
part of British Airways and essentially the remnants of the purchase of
the franchise operations run by independent companies City Flyer
Express and British Regional Airlines Ltd. The deals were completed by
Rod Eddington. Combined together as British Airways CitiExpress they
have not been a runaway success, City Flyer relocating to Manchester
(and dropping any ideas of adding/re-equipping with the Avro RJX,
signalling the death of that aircraft) and the former BRAL disposing
of its Jetstream operation to Eastern Airways. Whilst never using the
term ”low cost” both City Flyer and BRAL were run under strict
budgetary control. Integrated into British Airways costs inevitably
rose.
BA Connect has a limited timescale to succeed. It has embarked on an
aggressive marketing campaign designed to compete with the no frills
carriers including a two-tier booking system. New routes are on offer.
Birmingham ” Belfast City, Birmingham ” Berlin, London City ” Milan
Malpensa. Dropped are London City ” Geneva and Manchester ” Oslo.
If it all works fine, but if not what then? Will Captain Walsh
dispose of the operation? Who might purchase/invest? Would it become
a franchise? Certainly the possibility of buying an airline with the
British Airways name attached will appeal to some.
There are two important precedents (and some minor ones too). BMED,
born as British Mediterranean in 1994, has not always been profitable,
but is today a very efficient expanding airline, virtually seamless
as BA (but more anon) currently with eight Airbus A320 series and six
more to follow. What was once Gibraltar Airways is now British
registered GB Airways, also an A320 series operator with again six
A320 series machines on order.
Under the franchise system the public is led to believe that they are
booking BA and that there is no difference with the main line
operations. All have their own sales and marketing organisations but
under the British Airways banner. BMED for instance has a far
superior business class operation than Club Europe (or you could argue
it does not offer the flat bed of Club World), and in most respects
GB is geared up for leisure travel. However the tickets are not
completely interchangeable and can lead to conflicts of interest.
When British Airways made a blanket announcement of new routes for the
summer it included Izmir in Turkey but forgot Ankara (BMED) and
Dalaman (GB Airways). One country, three BA operations.
The BA franchise system seems to be working for everyone, the
independent airlines buying into it having their own philosophy and
cost structures. Clearly they contribute to the British Airways
bottom line without risk or investment. What happens for the future
we shall see? Something else for Willie to ponder over.
MG
http://www.flybmed.com
http://www.gbairways.com
http://www.ba.com