By Joe Brancatelli
Portfolio.com: Business Travel
Tuesday, March 11, 2008 11:13 AM
Dust off your passports, fellow travelers, because anything and everything innovative in the skies is happening overseas.
Thanks to a confluence of factors -- new airport terminals, new service concepts, new airlines, and especially new aviation treaties -- by the end of the spring, the international skyscape is going to look very different than it does today. At least in the giddy early days, service should improve, and there will be more flight options. Whether that good news will last, however, is anybody's guess.
It all starts with something called Open Skies, a prosaic name for a radical restructuring of the untidy travel treaties between the U.S. and the European Union. Stripped of the jargon and the caveats, the new deal essentially allows U.S. and E.U. airlines to fly anywhere they want across the pond, instead of laboriously negotiating route by route, country by country, and, sometimes, airport by airport.
At the moment, they all want to fly to Heathrow, London's overcrowded, unloved, and ultracompetitive major airport. Not coincidentally, Heathrow's 20-years-in-the-making Terminal 5 opens on March 27, just two days before Open Skies officially kicks in. Over the course of a month, British Airways, Heathrow's major tenant, will consolidate almost all its flights in Terminal 5 -- and a squadron of other carriers will immediately fly right into the space that B.A. is vacating.
Four U.S. carriers previously locked out of Heathrow will begin offering new flights there. Delta Air Lines will operate from Atlanta and New York's John F. Kennedy Airport. Continental Airlines will add flights from its hubs in Houston and Newark, New Jersey. U.S. Airways will take flight from Philadelphia. And Northwest Airlines will launch operations to Heathrow from Detroit, Minneapolis, and Seattle.
The two U.S. carriers that were already permitted to fly into Heathrow are bulking up too. American Airlines, which had been flying to London's Gatwick Airport from Dallas/Fort Worth and Raleigh-Durham, will shift those routes to Heathrow. And United Airlines is adding flights from Denver to Heathrow to augment its other London routes. Even Air France is getting into the act: It will cooperate with Delta on new flights to Heathrow from Los Angeles.
Don't think the Heathrow hustle comes cheap. Even with its new terminal building, Heathrow won't have any new runway space -- and that means takeoff and landing slots are commanding insanely high resale rates. One example: In a filing with the Securities and Exchange Commission in March, Continental revealed that it paid other carriers a total of at least $209 million to acquire its Heathrow operating rights. The airport's high cost of entry probably means that fares won't decline much even with all of its added capacity.
British Airways has reacted to the new competition by creating an entirely new airline called -- get ready -- OpenSkies. It won't fly to Heathrow, though. OpenSkies' job will be to connect J.F.K. nonstop with continental capitals such as Paris, Brussels, and Amsterdam. Pending government certification (and a strike threat from disgruntled B.A. pilots), OpenSkies expects to launch late in the spring. Its cozy planes will feature just 82 seats: 24 beds in business class, 30 chairs in coach, and 28 in a revolutionary "premium economy" cabin that will offer big, comfortable recliners and a price somewhere between coach and business class.
Next year, B.A. will also pioneer service between New York and London's City Airport, a tiny facility just six miles from Canary Wharf, the epicenter of the British capital's renaissance as a global money center. B.A. says it will fly planes outfitted with just 28 business-class beds.
All this Anglo-American activity is obscuring some other intriguing international developments. Here's a snapshot of what else is on the agenda.
* Lufthansa, the hugely profitable German carrier, will expand its capacity between the U.S. and Germany as a result of Open Skies. It is scrapping most of its small jet flying between the two countries in favor of larger jets with the traditional three classes of service. The fate of its leased fleet of all-business-class jets has yet to be announced.
* Conversely, Singapore Airlines is getting into the all-business-class business. This spring, the airline will convert its ultra-long-haul nonstop routes from Newark and L.A. to all-business-class operations. The 18-hour flights to Singapore on specially configured Airbus A340-500 jets will have only 100 seats. Each one is 30 inches wide -- about eight inches wider than the global business-class standard -- and converts to a roomy flat bed.
* Have you been waiting for your shot at the Airbus A380, the double-decked leviathan that went into service late last year? Emirates airline will begin flying the world's biggest jet between J.F.K. and Dubai in October. Emirates' first-class section is outfitted with private suites and "room service" buttons.
* The underserved market between Australia and the U.S. got its own Open Skies treaty in March, and the first new transpacific contender is expected to be V Australia, created with the help of Virgin entrepreneur Richard Branson. It hopes to launch flights before the end of the year.
* More and better links between the West Coast and Europe are also on the way. Assuming that it doesn't collapse under the weight of its long-standing financial problems, Alitalia will launch nonstops between L.A. and Rome in June. S.A.S. has announced its intention to fly between San Francisco and Copenhagen. Lufthansa will connect Seattle and Frankfurt later this month, and in June, Delta will launch nonstops between Salt Lake City and Paris.
* A skyway between Silicon Valley and Bangalore, India's technology center, will debut in August. Both Air India and Kingfisher, the high-frills airline owned by India's huge UB beverage group, will have flights from San Francisco.
* Finally, even though we seem on the verge of a new Cold War with Russia, more service to Moscow is on the way: Singapore Airlines is launching nonstop flights between Houston and Moscow later this month, and American Airlines will link Moscow to its hub at Chicago's O'Hare Airport in June.The Fine Print . . .
London isn't the only major city with a new airport facility. As part of its preparations for the Summer Olympic Games, the Chinese government has opened a gigantic new terminal in Beijing. The $2.7 billion project, Terminal 3, is purportedly the largest building in the world. It has about 20 percent more space than all five Heathrow terminal buildings combined.
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