British Airways Plans Gatwick Low Cost Carrier

British Airways Plans Gatwick Low Cost Carrier

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International Airlines Group (IAG), the parent company of British Airways, has plans to launch a new low cost carrier by the summer of 2022, to be based at London Gatwick Airport (LGW).

IAG’s new London Gatwick-based low cost carrier

While nothing is finalized, a memo from British Airways management outlines the company’s plan to form a new low cost carrier. As shared by Head for Points, here’s how the concept is described:

“As you know, we haven’t been operating short haul flights at Gatwick during the pandemic. This was previously a highly competitive market, but for us to run a sustainable airline in the current environment, we need a competitive operating model. Because of that, we are proposing a new operating subsidiary to run alongside our existing long-haul Gatwick operation, to serve short haul routes to/from Gatwick from summer 2022. This will help us to be both agile and competitive, allowing us to build a sustainable short haul presence at Gatwick over time.”

It’s stated that the company is in discussions with unions about the possibility of something like this launching.

British Airways’ tricky Gatwick situation

British Airways has been trying to decide what to do with Gatwick Airport since the start of the pandemic:

  • Both Gatwick and Heathrow are slot restricted, with Heathrow slots being especially expensive and hard to come by
  • With demand way down, British Airways has understandably largely consolidated operations at Heathrow, to be more efficient
  • During the pandemic British Airways has been operating a skeleton schedule out of Gatwick — the airline has operated select long haul flights, but cut its short haul network altogether
  • While requirements to use slots have been relaxed for the time being, eventually the requirements will be restored, and it’s anyone’s guess when British Airways will get back to pre-coronavirus passenger numbers
  • There had been talk of British Airways pulling out of Gatwick altogether, though understandably British Airways is trying to avoid that

British Airways’ newest plan seems to be to continue operating “mainline” British Airways long haul flights out of Gatwick. However, the airline recognizes it will need short haul traffic, but doesn’t think its current cost structure is competitive. A few thoughts:

  • From a passenger experience standpoint, it can’t get much “lower cost” than what British Airways offers
  • This seems to ultimately be a labor play, to get lower paid pilots and flight attendants to be based there; British Airways had this back in the day, but had to switch up contracts during the pandemic in order to downsize
  • IAG already has two low cost carriers, Vueling and LEVEL; while I’m sure the cost structure is right, it seems British Airways doesn’t think these are a good fit in terms of branding
  • “Go” was a British low cost carrier that was founded by British Airways in 1998, and it operated flights from London Stansted to points in Europe; the airline ceased operations in 2005 after being purchased by EasyJet, but it sounds like the concept British Airways is going after here is similar

Bottom line

British Airways is working on launching a low cost carrier based at Gatwick. The idea is that this would allow British Airways to continue to operate long haul flights out of Gatwick, while getting short haul feed with a lower cost business model.

British Airways has transformed quite a bit over the past decade to lower costs, though I guess British Airways is looking for more labor concessions here. This would be IAG’s third low cost carrier. I’ll be curious to see how this works out, because at this point I can’t imagine British Airways’ labor unions will be very trusting of the company.

What do you make of the idea of a British Airways low cost carrier based in Gatwick?

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  1. John

    I don't mean to be flippant or sarcastic, but isn't BA (and the entire IAG mob) virtually an LCC already in the eyes of discerning travellers???

  2. Apso Eyot

    I can see it being called LEVEL UK. Then LEVEL can once again fly short-haul intra-European routes, so it would look like the old LEVEL Europe did, but just based in the UK instead.

    Side note—I don’t get the point of Iberia Express. If it’s just another LCC owned by IAG, couldn’t they just merge them into Vueling? Technically they could have also merged Vueling into LEVEL and rebrand it as the new “LEVEL Europe”...

    I can see it being called LEVEL UK. Then LEVEL can once again fly short-haul intra-European routes, so it would look like the old LEVEL Europe did, but just based in the UK instead.

    Side note—I don’t get the point of Iberia Express. If it’s just another LCC owned by IAG, couldn’t they just merge them into Vueling? Technically they could have also merged Vueling into LEVEL and rebrand it as the new “LEVEL Europe” based in Barcelona, so then everything is consolidated into the LEVEL brand for IAG’s LCC operation, but at the same time I really like Vueling’s livery, so maybe they should stay. Anyhow, I agree that it’s about time IAG simplify their LCC porfolio wherever they can.

  3. UpperDeckJohnny

    It was the mistake of the century to sell off GO to Easyjet. It was well put together, had a market and a brilliant future.

    The sale was to make the balance sheet look good for that year. BA's first problem, shareholders, their second and biggest, is unions.

    BA Flight attendants, mainly, are members of the same union as all other staff. So many times the union has negotiated deals for all staff. Only at...

    It was the mistake of the century to sell off GO to Easyjet. It was well put together, had a market and a brilliant future.

    The sale was to make the balance sheet look good for that year. BA's first problem, shareholders, their second and biggest, is unions.

    BA Flight attendants, mainly, are members of the same union as all other staff. So many times the union has negotiated deals for all staff. Only at times when specific duty days are in question do they respond.

    If they go ahead, which I hope they are able to, I'd go for BA Express.

  4. Ben

    As you identify, sounds like Vueling. But so many horror stories about Vueling quality and customer service.

    I would actually like a good alternative for short-haul than going to LHR, and to the not-really-London airports like Luton. So fingers crossed it's better than past attempts!

  5. Frederik

    I personally find EasyJet exit row more comfortable than most British Airways short haul product, especially if priced much cheaper than BA. And since it seems they have updated the cabins to very slimline, low cost style seats and also typical economy legroom just
    29 inches is smaller than low cost competitors Ryanair and EasyJet. Yet British Airways rarely competes with them on price, especially now that the full service carriers have also unbundled...

    I personally find EasyJet exit row more comfortable than most British Airways short haul product, especially if priced much cheaper than BA. And since it seems they have updated the cabins to very slimline, low cost style seats and also typical economy legroom just
    29 inches is smaller than low cost competitors Ryanair and EasyJet. Yet British Airways rarely competes with them on price, especially now that the full service carriers have also unbundled their fares in terms of Hold Luggage and Seat Selection.

    Although still fundamentally a solid and importantly a safe airline, sadly they are trading off the reputation for luxury and service that they earned in the 20th Century.

  6. askmrlee

    Vueling and Level are not LCC enough for IAG at LGW? Is their competitive advantage the ability to earn Avios?

  7. Jojo

    British Airways has a very successful history of profitable, lower cost franchise partners; it just has a habit of selling them to streamline operations whenever there is a management change. At Gatwick GB Airways was a very successful operation for BA but they sold it to easyJet for reasons beyond me, similar to Go at Stansted (both were profitable). The strategy of a different brand does not make sense at all; BA are basically the...

    British Airways has a very successful history of profitable, lower cost franchise partners; it just has a habit of selling them to streamline operations whenever there is a management change. At Gatwick GB Airways was a very successful operation for BA but they sold it to easyJet for reasons beyond me, similar to Go at Stansted (both were profitable). The strategy of a different brand does not make sense at all; BA are basically the same price as easyJet from Gatwick and the only thing that gives BA the edge is the executive club, and brand value. They absolutely will not be able to compete with a new lcc brand, unless they are deciding to go down the franchising route, which I could see being a success for them

  8. Peter Fox

    Go fly was there former LCC established in 1998 based in London Stanstead (STN). By 2005 it was bought in to what we today know as Easyjet

  9. Davis

    It seems like anytime IAG faces an issue, they launch another low cost carrier in an attempt to fix it. Weird strategy.

  10. Stuart

    The definition of insanity. The highway is littered with legacy carriers across the world and their LCC off-spring during the past nearly 30 years. The cultures, brands, and infrastructures (including unions) just can't make it work. But every new management team seems to believe that they have the magic formula.

  11. Jordan

    I’ve never understood how BA survives short haul out of London. Looking at tickets to Vienna/Budapest in September: Wizzair 3x per day from Luton for 6£ OW, Ryanair 2x per day out of Stansted for 8£ OW, and BA, with 3 flights per week for 140£. All I get is a measly carryon bag (otherwise 20£ extra on LCCs) and the hassle of Heathrow. At this point even legroom and comfort are comparable, so why choose BA?

  12. Martin

    yeah, do it. Call it "Level Discover!"

  13. Endre

    Level is a failure. Maybe they’ll launch BA Express or BA Regional something like that, similar to what IB, AF, and LH are doing rn

  14. John

    "From a passenger experience standpoint, it can’t get much 'lower cost' than what British Airways offers"

    Strongly disagree with that statement of yours. I fly a good amount on all three alliances intra-Europe. IMO, the worst of the bunch are IB and TP.

    Instead, BA has great staff. They are in a completely different ball park than IB or TP. If you've had more than a few IRROPS with these Iberian carriers, you'd know what...

    "From a passenger experience standpoint, it can’t get much 'lower cost' than what British Airways offers"

    Strongly disagree with that statement of yours. I fly a good amount on all three alliances intra-Europe. IMO, the worst of the bunch are IB and TP.

    Instead, BA has great staff. They are in a completely different ball park than IB or TP. If you've had more than a few IRROPS with these Iberian carriers, you'd know what I mean.

    Also, as a OW elite, I find BA quite enjoyable even on their cheapest HBO (=hand-baggage only) fares. You get decent seats free of charge at booking. OW has good lounges. Etc.

  15. Philldeparis

    Seems that they are copying what they did with Iberia Express in a way (which is essentially a third low cost carrier in IAG with a differentiated product).

    1. John

      I don't fly IB Express a ton but when I do fly them, I see little difference to IB main line. IB main line has tons of flights op. by Air Nostrum which feels fairly similar to IB Express seat configuration wise.

      The product differentiation is so small (Level is another issue but what I mean is IB vs. IB Express), making it hard to see that as the play. Ultimately, Lucky's guess that it might have to do with labor cost makes the most sense to me.

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Stuart

The definition of insanity. The highway is littered with legacy carriers across the world and their LCC off-spring during the past nearly 30 years. The cultures, brands, and infrastructures (including unions) just can't make it work. But every new management team seems to believe that they have the magic formula.

Philldeparis

Seems that they are copying what they did with Iberia Express in a way (which is essentially a third low cost carrier in IAG with a differentiated product).

Davis

It seems like anytime IAG faces an issue, they launch another low cost carrier in an attempt to fix it. Weird strategy.

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