The skies over the north Atlantic are still unusually empty. But a new battle for a share of some of the busiest and most lucrative flight paths in the world is already under way. US airline JetBlue defied the aviation crisis by launching its first transatlantic service this week, promising to spark a price war with rivals including British Airways and Virgin Atlantic. Fares for return trips start at £329 in economy and £999 in business class, significantly cheaper than many rivals. Within hours of the inaugural flight landing under cloudy skies at London’s Heathrow airport, JetBlue’s British chief executive Robin Hayes was trumpeting victory over the “very high fares” of his rivals. Hayes said prices have fallen across the board since his airline announced its pricing plans in May, and took credit for it. “I am 100 per cent certain it is because of JetBlue,” he told the Financial Times. But JetBlue is not the only airline gambling that passengers will rush back once US and UK travel restrictions are fully lifted. Norwegian start-up Norse Atlantic Airways this week said it expected to have a fleet of 15 planes flying across the Atlantic by next summer, while Irish flag carrier Aer Lingus has secured approval to start flights between Manchester and the US. Transatlantic flights are the crown jewel in global aviation. Worth an estimated $9bn a year in revenue before the pandemic, established airlines have relied on them for a steady stream of corporate customers and wealthy holidaymakers willing to pay high prices to sit in premium class seats. This lucrative air corridor has attracted ambitious new entrants since Freddie Laker’s Skytrain burst on to the market in the late 1970s. Few low-cost carriers have prospered though. On long-haul routes, airlines typically struggle to turn a profit without charging high fares, because operating costs such as fuel are much higher. Norwegian Air last year gave up on low-cost long-haul travel and shrank into a smaller, regional airline, while Wow Air, another budget airline that offered transatlantic flights, went bankrupt in 2019. Pandemic travel restrictions also continue to hold down demand for long-haul flights. While vaccinated visitors from the US can now escape quarantine when they arrive in the UK, the US border is still closed to non-citizens who have been in the UK or Schengen area in the previous 14 days. The impact on airlines whose businesses are built around the north Atlantic has been brutal. British Airways will fly only about a third of its normal flight schedule this quarter, while Virgin Atlantic is currently flying at around half of its normal capacity and has spent the past 15 months raising new capital to allow it to survive the pandemic. JetBlue, however, enters the market as an established US airline with a strong domestic and international network, and has benefited from US citizens being able to visit Europe this summer. Mark Simpson, an aviation analyst at Goodbody, said it would be easier for JetBlue to compete with established transatlantic rivals because it offered business class seats, while other budget carriers did not. The economics of JetBlue’s fares are based on the use of a new type of long-range, fuel-efficient single-aisle aircraft over the Atlantic. While the Airbus A321LR seats fewer passengers than wide-body equivalents such as Boeing’s 747 jumbo jet and 787 Dreamliner, it is also far cheaper to run. “They are operating narrow-body aircraft with a much lower trip cost than the legacy operators. It is going to be much cheaper per flight for JetBlue to operate, so the ability to lose money is reduced,” said Edmond Rose, an aviation consultant and former senior executive at Virgin Atlantic. JetBlue will operate a daily service between New York and Heathrow throughout August but, in a sign of the lingering impact of the pandemic, will then cut down to four a week from September. It also plans to launch a daily service from London’s Gatwick airport in late September.
Still, an executive at a rival airline noted that even if the flights were full, they would take only a small share of the normal transatlantic market. Hayes said JetBlue had six-long range aircraft on order, and could “hopefully” get up to five flights a day between New York, Boston and London by next summer. Meanwhile, Norse Atlantic, a Norwegian start-up whose investors include the founder of the now-downsized Norwegian, hopes to begin flying by the second quarter of next year. While the airline is yet to outline its route plans, it has leased 15 Boeing 787 planes and is in the process of applying for a UK operating licence. “We strongly believe that there is a need for a new and innovative airline serving the low-cost intercontinental market,” chief executive Bjorn Tore Larsen said. Irish carrier Aer Lingus this week received a UK licence to fly between Manchester and the US, using the same smaller, more efficient Airbus planes as JetBlue, while French carrier La Compagnie has begun all-business class flights linking continental Europe to the US. For an industry that has been devastated by the pandemic, the outbreak of optimism is welcome. But it is tempered with frustration about the slow pace of progress. “On long haul, there is a lot to look forward to, but in the short-term, to get passenger volumes recovering more quickly, we do need the government to relax travel restrictions,” Gatwick’s chief executive Stewart Wingate said

Source: Civil Aviation Authority-Qatar