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Long Haul on a Short Plane: An Analysis and Trip Report of British Airways JFK-LCY Service [Part Two]

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Long Haul on a Short Plane: An Analysis and Trip Report of British Airways JFK-LCY Service [Part Two]

Long Haul on a Short Plane: An Analysis and Trip Report of British Airways JFK-LCY Service [Part Two]
June 11
14:22 2014

A Service like None Other


British Airways’ London City operation is unique in many ways. Two Airbus A318s, outfitted with only 32 custom Club World seats, are used for the crossing. While increasingly unprofitable to operate for most airlines, they’re the only ones left serving North America; the A318’s are perfectly suited to the LCY mission.

(Credits: Author)

(Credits: Author)

First time London City passengers more accustomed to wide-body aircraft on long-haul flights reportedly sometimes board the stubby narrow body A318 and ask “Where’s the rest of the plane?” The two “Baby Busses” operate a schedule of two round-trips per day Monday-Friday and one on Sunday. Both aircraft are ferried to Gatwick on Saturdays for maintenance, which is a low traffic day for this market. Besides, London City Airport is closed midday Saturday to midday Sunday. Sunday afternoon, LCY-JFK flights resume with BA003.

From a pilot’s perspective, this is a very unique operation. Optimized for operations into LCY’s 4,948’ long, 100’ wide narrow runway, the two A318s, G-EUNA and G-EUNB, are the only A320 family aircraft in the world equipped with steep approach software. The software modifies the control laws of the A318 when the function is selected by the pilots, automatically deploying some of the wing spoiler panels to provide additional drag when the aircraft is on final approach. The modification also provides alternative audio alerts to the crew and modifies spoiler deployment automatically below 120 feet as the aircraft lands.

(Credits: Author)

(Credits: Author)

This European Air Safety Agency certified software allows the A318 to perform approaches at descent angles of up to 5.5°, as opposed to the standard 3° for a normal approach. This also aids in noise abatement for this very urban-located airport. As we’ll detail later in the flight review, the take-offs and landings are quite thrilling, analogous to landing on an aircraft carrier, though very smooth.

With LCY residing on the Thames and its runway quite literally built on a pier in the water, fog can occasionally be an issue causing diversions to Gatwick about 10% of the time in winter and 1% of the time in summer. The BA staff, always prepared for this possibility, is known to be very buttoned up in arranging ultra-fast track immigration and transportation as a contingency to get passengers to their destinations very quickly.

The pilots who fly this mission are the only ones in the world that regularly fly the entire A318/A319/A320/A321 family in scheduled service. Only 50 pilots out of approximately 1000 A320 series qualified aviators at BA are able to secure this very senior, in demand bid. In fact, the A318 has the highest seniority of any BA fleet type. While both captains and co-pilots can perform take-offs, only the captain typically performs the precision landing at London City, though co-pilots are trained to perform it and practice it in the simulator.

Most crews are able to work two to three crossings per month. The rest of the time they fly normal short and medium haul schedules. Because of the specialized approach into LCY, the flight crews not only train in the simulator but in actual training flights with no passengers aboard, often during the plane’s weekend down time.

(Credits: Author)

(Credits: Author)

Flights from JFK to LCY typically carry 17 tons of fuel. On the London to New York segment, LCY’s short runway doesn’t allow the aircraft to take on a full load of fuel so 6 tons is more than ample to reach Shannon. Besides, the A318 doesn’t have the range, when fully loaded, to fly westbound from London City to New York owing to headwinds and weight restrictions at LCY. On the Shannon SNN-JFK segment, somewhere around 17-20 tons of fuel is taken up depending on forecasts.

The Gatwick based cabin crews are generally very senior as well, with only 250 on roster. This flight is considered so premium and is in such high demand that BA employees are not given free travel privileges on it. An interesting footnote is that with only two A318s in the fleet, there is no slack in the system when an aircraft is out of service for maintenance, so the airline times the heavier checks during lower demand times of the year and will only operate one aircraft. Against the backdrop of the dominant British Airways / American Airlines North Atlantic joint venture, there is no shortage of alternative flights for customers.

The Business Case for a Flight That Truly Means Business


The JFK-LCY nonstop is a small player in an overall sense, and also in a premium sense, as the following tables illustrate:

Route

Weekly Seats

Capacity Share

JFK-LHR

38438

68.8%

EWR-LHR

16219

29.0%

JFK-LCY

352

0.6%

JFK-LGW

873

1.6%

TOTAL

55882

 

Route

Weekly Premium Seats

Premium Capacity Share

JFK-LHR

8202

73.5%

EWR-LHR

2598

23.3%

JFK-LCY

352

3.2%

JFK-LGW

0

0.0%

TOTAL

11152

 

At 0.6% of total capacity and 3.2% of premium capacity, the LCY-JFK flights are all but irrelevant contributors to the volume on this city-pair market. That being said, we believe that the flights are profitable in their own right, and they of course play an enormous strategic role in one of the world’s most important business travel markets.

According to our analysis, to operate JFK-LCY nonstop using the A318, it costs roughly $31,200 per flight inclusive of ownership costs, assuming a standard valuation for British Airways’ A318s. The LCY-SNN-JFK flights meanwhile cost roughly $35,000, including ownership costs, due to added costs of operating via Shannon.

For January-August 2013, British Airways had the following operational characteristics on JFK-LCY. The carrier offered, 9,792 seats, filling 7,533 of them for a 76.93% load factor.

*Readers please note that all of these figures are estimate and subject to a wide potential margin of error. Our fare estimates are conservative.

Thus to break even in the first nine months of 2013, BA needed an average roundtrip revenue of $2,960 per passenger (excluding government taxes – which are typically around 20% of the ticket). So in this case, an average roundtrip fare of $3,550 means the carrier breaks even.

Keep in mind that if you adjust for seasonality (missing Oct-Dec, the figures will be lower during that period), the loads likely come down to 72-73%, and applying the same fixes yields a required break even fare of roughly $3,800.

The average fare, we estimate, is roughly $6,500 roundtrip, so you’re talking about 38% operating margins (at least double that of British Airways’ overall long haul network). The only adjustment is that if you look at the summer, R/T fares are 5-6k, so an overall average R/T fare for the year of $7,500 is reasonable, especially given that loads are highest in the summer

The route is profitable; we’d estimate to the tune of $10-15 million a year net contribution to the bottom line once you include structural costs. Moreover, it plays an enormous strategic role in making the British Airways – American partnership the preferred operator in the lucrative New York City – London market, especially for the financial industry. At least another $3-5 million in profitability is tied to the boosts received due to corporate contracts and frequent flyer loyalty tied to the availability of this service.

 

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About Author

Chris Sloan

Chris Sloan

Aviation Journalist, TV Producer, Pursuer of First & Last Flights, Proud Miamian, Intrepid Traveler, and Did I Mention Av-Geek? I've Been Sniffing Jet Fuel Since I was 5, and running the predecessor to airwaysmag.com, Airchive, Since 2003. Now, I Sit in the Right Seat as Co-Pilot of Airways Magazine and airwaysmag.com. My favorite Airlines are National and Braniff, and My favorite Airport is Miami, L-1011 Tristar Lover. My Mantra is Lifted From Delta's Ad Campaign from the 1980s "I Love To Fly And It Shows." chris@airwaysmag.com / @airchive

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