BA scraps service to Chengdu, cited by airport expansionists as key, because not enough demand

Heathrow is keen on emphasising the importance of routes to countries like China, or the emerging markets.  It likes to give the impression that there is huge pent up demand for these services, and if only Heathrow could be much bigger, there would be numerous flights to all these places. It is just the absence of a 3rd runway holding them back ….. But now the service by BA to Chengdu, about which Heathrow was very proud, is to be cut after just over three years, in January. There is just not enough demand to make it pay.  It is not commercially viable, even with smaller planes. So nothing to do with a runway then. Chengdu was where British business would fly to and build trade links if only Heathrow was big enough, according to prominent backers of airport expansion.  From September 2013 there were 5 return flights per week, but that was later trimmed down to fewer.  BA’s 787 plane and Heathrow slot will be used to fly to New Orleans instead – spare slots are always used for the more lucrative leisure market destinations. The links to China were a key part of Heathrow’s submission to the Airports commission in November 2012. Heathrow led the Commission to believe in the need for such links.  Time after time, when slots become available at Heathrow, they are used to add capacity on profitable North American or European routes. 
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BA scraps service to Chinese city cited by airport expansionists

Heathrow service to megacity Chengdu is not commercially viable, says airline on eve of decision about new runway

By  Transport correspondent (Guardian)

But less than three years after British Airways found a Heathrow slot to fly to the Chinese megacity, and on the eve of a decision to build a new runway, the airline has dropped the route because it is not commercially viable.

BA launched direct flights to Chengdu, its fourth Chinese destination, in late 2013, and ran return flights five times a week. Even after having trimmed down the frequency and switched to a smaller, Boeing 787 plane, BA has confirmed that the service will end this January.

Launching Heathrow’s first submission to the Airports Commission in November 2012, the airport’s chief executive, Colin Matthews, said a lack of capacity was limiting Britain’s ability to connect to growing cities in emerging markets, such as Chengdu in China.

Two months earlier, the lack of direct flights to Chengdu was highlighted in an intervention from senior Conservatives that prompted the then prime minister, David Cameron, to set up Sir Howard Davies’s commission and pave the way for expansion.

In the opening line of an article demanding whether Cameron was “man or mouse”, MP Tim Yeo wrote: “What better way to kickstart Britain’s sluggish economy than by boosting trade with China? Perhaps with Chongqing, with 28 million consumers, many enjoying rising incomes. Or Chengdu, with 14 million.”

A year before that, the then mayor of London, Boris Johnson, lamented the Chengdu-goer’s plight as he again argued for more runway capacity. “We are making it harder for British business people to get to the future megacities from London than from our competitor airports. If you want to fly to Chengdu … you can get there direct from one of London’s Continental rivals – but you can’t get there from Heathrow,” he said in a comment piece.

In a statement, BA said on Monday: “We regret that we have decided to suspend the Heathrow to Chengdu route. We have a proud tradition of flying to China but despite operating this route for three years it is not commercially viable.”

Willie Walsh, the chief executive of BA’s parent company IAG, has previously blamed the British visa regime for the disappointing traffic on the route.

A spokeswoman for the airport said a “degree of ebb and flow on demand on specific routes” was normal, adding: “The record shows Heathrow overall has gained and maintained new long-haul routes that are so critical for the British economy.” Destinations in emerging markets such as Vietnam and Indonesia were among the six long-haul routes added since 2010, she said.

A spokesperson for Gatwick, which still hopes to beat Heathrow in building London’s next runway, said: “Lack of current connectivity to some markets – in China for instance – is less to do with capacity and more to do with lack of demand. When slots have become available, airlines at Heathrow have been consistently adding capacity on these profitable routes – such as North America and Europe – rather than use them for emerging markets.”

BA’s 787 plane and Heathrow slot will be used to fly to New Orleans instead.

https://www.theguardian.com/business/2016/oct/24/ba-scraps-service-chinese-city-airport-expansion-heathrow-chengdu-decision-runway?CMP=share_btn_tw

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The UK and China recently raised the number of flights allowed between the two countries to 40 returns each per week. But the UK only uses 29 of them (even fewer without Chengdu).

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See earlier:

 

UK and China renew bilateral deal so each could have 100 return flights (up from 40) per week

The DfT has renewed the bilateral aviation agreement with China, to allow more weekly flights between the two countries. Until now, the limit had been 40 flights by UK airlines to China per week, and 40 flights by Chinese airlines to the UK. This has been raised to 100 flights each. There will be no limit on the number of all-cargo services (but most Heathrow freight goes as belly hold, not separate freighter). Currently Chinese airlines operate 38 flights a week between the two countries, and UK airlines operate 29. The only UK airports that have flights to China are Heathrow and Manchester. The earlier deal was that any UK airline could serve a maximum of 6 separate airports in China. Now UK airlines can operate to anywhere in mainland China. Laying on the hype, Chris Grayling, the Transport Secretary, said the deal was a “big moment for the UK”. However, airlines will have to decide whether it makes sense to use the extra capacity to offer new Chinese flights to and from China, with doubtful demand, when transatlantic routes are more profitable. The hope is probably for more UK business and UK exports. The DfT ignores the problem that the UK imports from China more than twice as much as it exports to China. More flights may exacerbate that. House of Commons Library data says that: “In 2014, UK exports to China were worth £18.7 billion. Imports from China were £38.3 billion. The UK had a trade deficit of £19.6 billion with China.” Flights to and from Hong Kong are in a separate bilateral deal.

Click here to view full story…

 

More BA routes from Heathrow …. to key business destinations …. Palma and Ibiza

Anyone reading the statements from Heathrow about the capacity crisis and how there is a need for more flights to the emerging markets might be puzzled by recent news from British Airways. Back in February 2012 Willie Walsh said he planned to expand IAG  into lucrative emerging markets, such as Latin America and he hoped to use the extra Heathrow take-off and landing-slots from BMI to accelerate growth into emerging markets. But BA has now announced that it is putting on new flights from Heathrow to Palma (Majorca) from March, and to Ibiza. These are in addition to Mexico and Alicante, as well as  Bologna and Marseilles announced earlier.  There are also new flights to Leeds Bradford (and a mention of links for business connnections) and a new flight to Chengdu in China, announced earlier, as well as Almaty (Kazakhstan), Dublin, and Seoul among others, where there is likely to be a business component.  It is hard to believe there is much business benefit from weekend flights to Alicante or Palma or Ibiza.

http://www.airportwatch.org.uk/2013/01/uk-airport-capacity-is-expected-to-continue-to-increase-over-the-next-5-years/

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Heathrow finds space for new flights to Mexico – and Alicante

October 19, 2012

The Telegraph writes that it has taken Aeromexico four years to get some slots at Heathrow, and makes out that this is because Heathrow is full etc etc. There are already 4 flights per week to Mexico, and these new flights will bring the total number to 7 per week. The Telegraph compares this to Paris with 14 and Madrid with 19. In reality, due to the BA link with Iberia, there are relatively few flights from Heathrow to south America, as they go via Madrid. Looking at Heathrow’s website, and its new destinations, one could be forgiven for thinking the airport is only looking to attract tourists, as all its publicity about new destinations is about their tourism potential, and delightful things to go and see and experience. Not one word about their business potential, or the chances for business to drive UK exports. And Heathrow has found room for as many new flights per week to Alicante as there will be to Mexico. Driving UK exports via Alicante ? Really?

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Comment from an AirportWatch member:

It is not that airlines cannot get slots at Heathrow.  It may be the case that they cannot get slots at the time they want, but they could have other slots, when the airport is less busy. This is, however, not the way this issue is either described by the industry, or reported in the media.  The journalists probably don’t know the details.

 

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BA uses its new BMI slots at Heathrow, not for emerging economies, but largely leisure destinations. As usual.

June 27, 2012

BA got 42 daily Heathrow slots from taking over BMI. And it said very publicly, in March, that it would be using these to fly to the emerging economies – Asia, Africa and Latin America – which is part of the myth that the aviation industry is peddling at present. So what are the slots actually being used for? One flight per day to Seoul. The rest are domestic UK (Aberdeen Edinburgh, Belfast, Manchester), or Zagreb, Las Vegas, Barcelona, Bologna, Marseilles, Phoenix, Zurich and Bologna. So that is where the money is. So much for the desperate need for slots to fly to second tier Chinese cities. This really proves what a lot of misleading PR is being put out by BAA and the airlines at Heathrow.

Click here to view full story…

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