03 April 2008 - British Airways is planning to launch its OpenSkies subsidiary this summer with direct flights between New York and Paris. Managing director Dale Moss could not provide a specific start-up date as the carrier works through the regulatory approvals process, and said "it is not my place" to comment on the ongoing dispute between BA management and its pilots over who will fly OpenSkies-branded aircraft. But Moss, a 30-year aviation industry veteran, in an interview last week with
The Transnational provided a status report on OpenSkies and his perspectives on the transatlantic market. An excerpt follows.
In addition to presenting an opportunity to start your own operation, how will the United States-European Union Open Skies treaty [which took effect at the end of March] change the transatlantic market?
This is the beginning of a process that will go through different phases. It is in the best interest of aviation, especially across the North Atlantic, that it be open access and open ownership, so that this industry will have its opportunity to mature, mergers and acquisitions become sensible and get integrated into the package--as they should--and you don't have European or U.S. legislation blocking that maturity. This industry is on the edge of oblivion because it always has to gear itself for good years, because in bad years it just doesn't manage itself that well. So I am hopeful that this is the beginning of the maturing of an industry that really needs it.
Is there a possibility of Open Skies unraveling if the ownership issue [i.e., removing or raising caps on foreign investment in U.S. airlines] is not resolved?
The Europeans took a very good step of faith in agreeing to the first stage of this, but they were doing so by bearing in mind that there would be some meaningful development in the other stages. If that meaningful development of the other stages doesn't happen, I wouldn't want to speculate on what would transition from that. My gut suggests it may not be so positive.
How have the needs of multinational corporate clients changed over time, and how have airlines addressed those needs?
The needs of multinational corporations have always looked at the incredible balance of trying to manage their budget and to try to be respectful of their road warrior employees who are doing yeomen work--the balance between managing the cost and delivering the value. With information, their ability to move share--which will always increase the power of their voice--has gotten a lot better in recent years. The stage is set for good relationships because those relationships are going to be based on facts and the ability to deliver. But basically underneath, they are looking for the same things: trying to save some money, give a good product and have a reliable partner.
What is the expected clientele for OpenSkies?
Conceptually, we want to extend part of the British Airways offering to the corporate community. It is an opportunity to get a unique, premium product offering at competitive prices between New York and Paris [for starters]. To serve a maximum of 82 people is a very different feel as opposed to getting on a Boeing 777 or 747. Those are big airplanes.
OpenSkies is going to lend itself to frequent travelers who are a bit more discerning--including corporate road warriors who regularly do the transatlantic journey and are looking for something that makes that a little more enjoyable. It will be a great offering for many of the key clients that British Airways already has, and it may be an opportunity for British Airways to create new relationships.
Certainly no one could predict the future 11 months ago when you began planning, but what challenges do you now face in launching a new long-haul operation at a time when many companies are considering travel cutbacks?
Our proposition is a strong one. Eleven months ago, we didn't see fuel at $104 or $110 a barrel. We always had a hunch that 2008 had the potential to be a softer year. To what degree? I have been in the business for a long time now and have seen the ups and downs. When is a perfect time? I don't know if you get a perfect time, but this is our time and we need to make the best of it. Of course, people will still fly between New York and Paris. And there will be other European cities, too. Part of our job is to make sure we have a non-legacy cost platform that is significantly lower than anybody else.
