Radioactive 767s

This isn't really relevant when it comes to the airline industry, but it's still something you don't see everyday. Apparently British Airways is grounding three 767s - two at Heathrow Airport and one at Moscow's Domodedovo - indefinitely due to very low traces of radioactive substances.

The groundings are happening as part of the investigation into the poisoning of ex-KGB man Alexander Litvinenko, and the two events might be related. Of course, the risk to anyone on board the planes was probably next to nothing, but people who flew on affected flights (a list can be found here)
From BA's website:

British Airways has been advised that three of its Boeing 767 short haul aircraft have been identified by the UK government as part of the investigation into the death of Alexander Litvinenko.

The airline was contacted last night (Tuesday, November 28) by the government. It has taken the three B767s out of service to enable forensic examination to be carried out.

The initial results of the forensic tests, which was confirmed late this afternoon, has shown very low traces of a radioactive substance onboard two of the three aircraft.

British Airways has been advised that this investigation is confined solely to these three B767 aircraft, which will remain out of service until further notice.

British Airways understands that from advice it has been given that the risk to public health is low.

The airline is in the process of making contact with customers who have travelled on flights operated by these aircraft, which operate within Europe.

Iberia could split with BA, oneworldIberia could split with BA, oneworld

Spanish airline Iberia is thinking about ending its seven-year-old partnership with British Airways and the oneworld alliance. The airline's finance and strategy director said recently that Iberia didn't feel 'tied' to BA, stating that "In a marriage you need two parties and Iberia and British Airways' priorities have not always been the same...They [BA] have their priorities...and Iberia is not in first place." He also added that Iberia could potentially hook up with SkyTeam's Air France/KLM or Star's Lufthansa.

Some analysts have wondered whether or not this is just a ploy by Iberia to get increased attention from BA, which recently raised its stake in Iberia from 9% to 10% in order to get two seats on its board. But whatever the outcome, Iberia plans to be aligned closely with either BA, Air France/KLM or Lufthansa as the airline industry in Europe heads for more consolidation. We've seen this with Ryanair's ongoing attempt to merge with Air Lingus and serious talks between Air France/KLM and Alitalia (see the last few posts).

BA joins premium transatlantic competition

Last year I wrote about so-called 'boutique airlines' - airlines which catered exclusively to the first- and business-class markets - and also looked at the expansion of these types of airlines across the Atlantic, where they have been most prolific. A handful of these 'boutique airlines' include Maxjet, Eos, and Silverjet, which fly between the New York area and London. There's also L'avion, which flies between Paris-Orly and Newark. All four fly specially configured Boeing 757s or 767s in a business or first-class configuration.

Now British Airways is foraying into this group of carriers, which target the upscale leisure traveler but mostly the business traveler. It announced that beginning in the summer of 2008 it would start flying all-premium class transatlantic services. However, the interesting part is that it wouldn't just be to and from the UK - BA is looking at service from a US city (probably New York) to various European cities like Paris, Madrid, Frankfurt, Milan, and Zurich. The chief executive of BA, Willie Walsh, said that the airline would probably - like the 'premium competition' - use Boeing 757s and/or 767s, which are smaller than the 747s and 777s that the airline currently uses on transatlantic routes.

This seems like a natural choice for BA, which has accomplished a lot with its first and business class products. But these have come under increasing pressure from the start-up 'boutiques', so BA is trying to hit back with a 'boutique' of its own. However, the fact that it wants to fly between the US and other European cities, not just the UK, is a bit more surprising, and also a gamble. Analysts have pointed out that BA has lost money before in such moves, so we'll have to see if they will be successful this time round. In any event, the move certainly will increase competition on the transatlantic routes and bring the battle for premium customers beyond the 'boutiques' - airlines like Air France and Lufthansa, BA's main competitors, will have to look out as well.

Virgin eyes premium market

Speaking on the day of his airline's inaugural flight between London-Heathrow and Nairobi, Kenya, Virgin Atlantic chief Sir Richard Branson recently announced the launch of a business-only airline that would connect London and various European destinations with the US. Branson said that the airline "would provide choice and quality for the customer" and would hopefully be up and running in nine to 18 months.

The airline wouldn't be a fully separate entity; it would probably be an airline within an airline (Branson did say that the airline would be under the Virgin Atlantic name). The London airport was not yet mentioned - Heathrow, Gatwick, Luton, or Stanstead are all possibilities. Like arch-rival British Airways' newly announced service, Virgin's will connect London, Paris, Milan, Frankfurt and Zurich with the US (probably New York). "We've got to compete in this area," said Branson. "The service will be of the highest quality and will be competitive in terms of price." Virgin will also have to go up against airlines like Silverjet, Maxjet, Eos, and L'avion, all of which offer premium trans-Atlantic service.

Virgin is also reportedly in talks with aircraft manufacturers Boeing, Airbus, Bombardier and Embraer over a new aircraft order for up to 15 airplanes.

AiRUnion moves towards Star as S7 joins oneworld

Lufthansa announced on Wednesday that it will begin codesharing with the Russian airline alliance AiRUnion, which is made up of the carriers Domodedovo Airlines, KrasAir, Omskavia, Samara Airlines, and Sibaviatrans. The deal will help Lufthansa, which serves eight cities within Russia, create domestic connections. Likewise, the AiRUnion carriers will have access to Lufthansa's international network.

While the deal doesn't make AiRUnion a member of Star Alliance, of which Lufthansa is a founding member, it does move the Russian alliance closer to Star. AiRUnion already codeshares with Star carrier Austrian Airlines on the Moscow-Vienna and Krasnoyarsk-Vienna routes.

Novosibirsk-based S7 Airlines, Russia's number-two carrier, also announced a few weeks ago that it was in talks with British Airways to join the oneworld alliance. Aeroflot, the country's largest airline, is already a member of SkyTeam. So because there are three major airlines/groups in Russia (Aeroflot, S7, AiRUnion) and there are three major world airline alliances (SkyTeam, oneworld, Star), it would make sense that AiRUnion will probably become a Star member in the coming months.

British Airways orders 787, A380

British Airways announced last Thursday that it would order 12 Airbus A380s and 24 Boeing 787s, with options for 7 more A380s and 18 more 787s. The planes will be delivered between 2010 and 2014. "This is an exciting day for British Airways with our largest fleet order since 1998," said Willie Walsh, BA's chief executive. "It's great news for our business, our customers and the environment." Walsh also pointed out that the two new types are environmentally friendly and also produce a quarter of the noise of a Boeing 747-400.

BA has said that they will use the A380 to "provide more capacity for the airline's key high-density markets and [to] maximise use of scarce Heathrow slots", while the 787 will "be used to start new routes and increase frequencies in existing markets". The airline also announced that it is looking to replace the 747-400 and is looking at the 787-10, 777-300ER and A350XWB models as potential replacements.

BA's OpenSkies to merge with L'Avion

British Airways has announced that it will purchase Paris-based premium carrier L'Avion to add to its OpenSkies premium transatlantic subsidiary. The deal, which only set back BA $52 million in cash, will be completed this month, and OpenSkies will formally combine with L'Avion shortly thereafter.

In a statement, British Airways head Willie Walsh noted that "L'Avion is a successful airline that has built up a premium business in a relatively short period. It has many synergies with OpenSkies and buying it provides a larger schedule and an established customer base."

L'Avion flies Boeing 757-200 aircraft from Paris Orly to Newark, and is the last of the independent premium transatlantic airlines surviving - MAXjet, Silverjet, and EOS have all become victims of higher oil prices.