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British Airways buys L'avion, transatlantic business class market successfully monopolized
British Airways just announced that it was buying L'avion, the struggling business-class-only carrier that has recently been operating flights between New York's JFK airport and Paris's Orly.We here at Gadling have been speculating on the future of the small, proud airline recently. Considering the price of fuel and the trouble that niche, business-class-only carriers have had in the recent market, we even put it on Gadling's Hit List (one down, four to go!) among airlines at risk for bankruptcy, liquidation or buyouts this summer.
BA must be reading our articles and wanted to take advantage of the carrier whilie they were off balance.
Or perhaps this is a strategic acquisition to give more breathing room for BA's own daughter New York-Paris niche carrier, Open Skies to operate. With one less competitor in the market, Open Skies will surely now be able to dominate.
Indeed, this Reuters article says that L'avion will now become part of the Open Skies network. As far as integration, I'm not sure how the aircraft and staff will be placed -- on the JFK-ORY route or on another of the new airline's planned routes.
One thing is for certain however: with one less player in the transatlantic business class market, prices will surely go up.
Reader Comments (Page 1 of 1)
Shashank Nigam Jul 2nd 2008 4:11PM
How does this acquisition impact the British Airways and OpenSkies brands?
The effect of this acquisition on the parent airline's brand should be generally positive, due to two key factors. Firstly, the lack of competition would surely help the OpenSkies brand since there is no direct comparison for their services. Moreover, lack of competition results in lower price pressure - which means that OpenSkies can charge more realistic fares and be profitable sooner than later.
Secondly, the acquisition is of an all-business class airline, which adds greater value to BA/OpenSkies, since L'Avion had planes that offerred more luxury to the customer. So instead of sprucing them up, BA just needs to remove some seats to include Economy class, if they choose to.
In the end, this does mean the end of cross-Atlantic all-business airlines, and bodes well for British Airways as well. A win-win situation for both the airlines. A questionable one from the customers' perspective though.