British airline passengers often fail to appreciate how lucky they are. The UK is the main operating base for easyJet and Ryanair: Europe’s biggest budget airlines offer wider horizons at lower prices than any other country in Europe. Jet2 and Virgin Atlantic have well-earned reputations for excellent service. And that leaves British Airways with a tough challenge.
No other national carrier faces such intense competition on its home ground. Air France and Lufthansa face challenges from low-cost carriers, but not as intensely; and they can counter with their own budget brands, Transavia and Eurowings. On long-haul routes, all European airlines struggle to retain passengers against rivals to the west and, especially, to the east, from the Gulf and Asian carriers. But only BA has a local competitor of Virgin Atlantic’s scale and quality on all the most lucrative routes from London Heathrow.
But British Airways has a superpower: a majority of slots at the world’s most desirable international airport. BA’s portfolio, which includes more than 50% of valuable take-off and landing permits, is the most valuable intangible property in aviation.
Passengers are prepared to pay a huge premium to fly to or from the UK’s main hub. Airlines say many overseas passengers believe Heathrow is the only London airport, despite the capital being served by more airports than any other.
Throw in BA’s Avios frequent flyer scheme – “as addictive as crack cocaine”, according to one rival – and there’s enough demand for British Airways to make £1.43bn in profits last year. Imagine that as the airline making £50 a second in profit.
But sometimes, that slot portfolio becomes a liability. When things go wrong at Heathrow, the British Airways operation can collapse with frightening speed.
That’s what happened this weekend. On Friday, September 6, storms pounded south-east England for much of the day.
If there is a disruption at LHR, European airlines can easily cope: for Austrian Airlines, KLM and Swiss, Heathrow operations represent only a small part of their total operations.
But when bad weather hits BA’s home base, 100% of its flights are potentially affected. The carrier is far more sensitive to disruptions at Heathrow than anyone else – as it proved on Friday, Saturday, Sunday and Monday. British Airways grounded 265 flights, while cancellations involving other airlines were in single figures.
EasyJet has a parallel weakness at Gatwick, where it is by far the biggest carrier. A “staff shortage” in the control tower occurred on Sunday night, leading to around 80 flight cancellations.
Across from Heathrow, as many British Airways passengers were heading to the airport on Friday, the first wave of cancellations arrived at around 7am. The airline has clever systems that quickly and automatically rebook passengers on other BA flights if seats are available. Finding space is an increasing problem, with only one in six seats left empty on British Airways last year, so when wholesale cancellations start, there aren’t enough to go around.
Due to the domino effect at Heathrow airport, some passengers were booked on later flights but these flights were also cancelled.
“BA’s short-haul programme has always fallen apart faster and more fatally than its rivals when faced with major disruption,” says a senior aviation official.
“It’s all about the way you plan and organise your crew schedule. A plane from Brussels, pilots from Amsterdam and cabin crew from Stockholm might all need to come together at Heathrow to make a flight to Barcelona.
“During periods of disruption, the possibilities of things that can and will go wrong multiply rapidly, far beyond the capacity of this Humpty Dumpty-style fragmented mess to be put back together again.”
Add in the complexity of restrictions on crew working hours, and the knock-on effects can last for days.
So why not keep more personnel and spare aircraft? Even at a time when planes and pilots are at a premium, if you can find them, durability is expensive. Keeping planes on the ground just in case, when they could be making money for the airline, is a significant opportunity cost.
An absurd ruling by the European Court of Justice has stated that airlines must have crews on standby and drinking coffee at every airport they serve. If that happens, almost all of aviation would be rendered impractical. Airlines have wisely ignored the ruling.
BA, like other airlines, is choosing the appropriate level of redundancy: balancing the cost of keeping planes crewed and ready to fly to keep customers happy with the financial and reputational damage that occurs when there is not enough headroom in the system.
“We have a terrible shortage of pilots at Gatwick,” said one insider. BA’s answer to easyJet is Euroflyer, a short-haul subsidiary based at Gatwick. But to deliver the promised programme, British Airways is buying capacity to keep the operation more or less on track.
Tony Wheeler, co-founder of Lonely Planet travel guides, said he was surprised to learn that his BA flight from Gatwick to Malaga was operated by “a company called Danish Air Transport using a 16-year-old Airbus belonging to Sichuan Airlines”.
Hiring extra aircraft and crew is a normal part of an airline’s operations. But large-scale cancellations are not. Monday morning’s departure screens did not make for happy reading for British Airways passengers: 07:35 to Amsterdam, 07:45 to Verona, 07:45 to Alicante and 07:55 to Nice were all cancelled. At least some of the Alicante passengers may have found seats on the previous day’s departure, which was eventually delayed by 17 hours.
British Airways finds it difficult to keep to its flight schedule even in relatively normal times.
In 2023, on-time performance – the proportion of flights delayed by less than 15 minutes – was below 60 per cent. Two in five passengers were delayed beyond that 15-minute margin. BA’s sister airline, Spain’s Iberia, scored 89 per cent.
Partly because of British Airways’ poor timekeeping, BA earlier this year extended the “minimum connection time” at its Heathrow Terminal 5 hub from one hour to 75 minutes. The airline hoped that by extending connections, fewer customers would be stranded or rebooked.
Its continental rivals offer much faster connections; a 25-minute journey to Vienna is more than enough time to transport passengers and their luggage.
British Airways, which currently takes three times as long, says it has made “significant investments to improve on-time performance through 2024, which will lead to cost savings through greater productivity and efficiency”.
Stevie Ferguson is one of many passengers who has so far not been affected: “Flew British Airways last week,” he writes. “Transfer via Heathrow. Absolutely awful. Five hour delay. Luggage lost on the way home.”
The lesson from last year’s stellar financial results is something passengers don’t want to hear: that BA can still make big profits even if service standards fall further.
But safety standards are non-negotiable. One reason British Airways continues to command good prices is the trust among the travelling public that British Airways flies well. Keeping passengers and crew safe is an obsession. The last fatal accident involving BA occurred before most of its staff and passengers were born: a fire on the runway in Manchester in August 1985, killing 55 people.
Since the 1980s, there has been talk of expanding Heathrow by adding one or more runways. However, all efforts have been in vain. The longer this inertia continues, the better it is for British Airways; as Heathrow expands, its slot ratio decreases.
Scarcity is everything: these slots remain a licence to make a profit at a rate of £50 per second.
Happy days for British Airways shareholders, if not all its passengers.
For more travel news and advice, listen to Simon Calder’s podcast