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LUXURY AIRLINES

June 6, 2014 BE_Post, Blog No Comments

 

TOPIC: LUXURY AIRLINES

LEVEL: DIFFICULT

Read the introductory text about luxury in the airline industry. Follow links for additional material and answer the questions below:

The economic downturn, industry experts say, “has clipped the wings of luxury travel” (http://in.reuters.com/article/idINTRE6531V720100604 ).

It’s true, considering that some of the industry’s most promising high-end boutique carriers filed for bankruptcy a few years ago. Among them – EOS (an American luxury airline that went broke in 2008 and claimed to be “Uncrowded. Uncompromising. UNAIRLINE” http://en.wikipedia.org/wiki/Eos_Airlines ), L’Avion (a French carrier that was acquired by British Airways and integrated into BA’s luxury airline), MaxJet (an American airline that positioned itself as “Business Class. Only Smarter”, but ceased operations as early as 2007), and Silverjet (a British airline which claimed to be “world’s first carbon-neutral” carrier, failing in 2008).

Nevertheless, aviation giants, such as British Airways and Singapore Airlines are still refusing to accept the low-budget, no-frills approach despite the fact that even business class passengers are bargain hunting for tickets these days.

Singapore Airlines is introducing a deluxe cabin to its Airbus A380. The 12 “Singapore Suites” all feature a standalone bed and a custom-made armchair, as well as a full-size wardrobe, large-screen TV and a rich selection of music CDs and movies. (http://m.bornrich.org/entry/singapore-airlines-introduces-15k-singapore-suite-to-its-airbus-a380/  ).

Meanwhile British Airways that already owns OpenSkies (http://en.wikipedia.org/wiki/OpenSkies ) – a fully owned subsidiary business-class-only airline – is introducing a luxury-only flight to New York.

1. Please answer the following questions based on the additional material above:

1.   According to Peter Yesawich, what is the first prerequisite of going into a tough economy? (answer: luxury airlines going out of business)

2.   What does he mean when he says that the real profit is in the front of the plane? (answer: he means that business class or first class passengers are the ones that bring real money to the airline)

3.   Excluding long-haul flights, who flies in business class these days? (answer: upgraded customers)

4.   What does Peter Yesawich mean when he claims that “the rest covers the overhead”? (answer: he means that revenues brought by any class lower than first or business, cover overhead expenses (ongoing expenses) of an airline)

5.   What does today’s luxury traveler incline towards in terms of air travel? (answer: private jets)

2. Determine whether the following statements are true or false:

1.   A recent trend in luxury air travel is fractional jet ownership (answer: T)

2.   When it comes to long-haul travel, stars and executives choose scheduled flights with seats in business or first class (answer: T)

3.   Singapore Airlines is introducing a deluxe cabin upgradable from economy (F)

4.   High-end boutique carriers, like EOS and SilverJet, are now competing with BA for the London-New York route (F)

5.   British Airways is considering closing OpenSkies and concentrating on its single luxury route to NY. (F)

3. Watch the CNBC report about BA’s luxury-only flight, read the blog post about the new venture on “Plane Stupid” and answer the following questions:

http://www.planestupid.com/blogs/2009/09/30/british-airways-launches-new-yuppie-flight-amidst-protests

http://www.cnbc.com/id/15840232?video=1279513190

1.   Why did BA’s decision to start a new luxury-only flight cause uproar among environmentalists? (answer: because BA has pledged to cut carbon emissions and yet opens a flight that will contribute to them)

2.   How does Willie Walsh explain his decision to make this investment amidst recession talks? (answer: he believes that the industry is on the rise and the flight will start bringing profit in the first year of operations)

3.   How does he justify his business decision in environmental terms? (answer: the new

4.   What kind of client profile is BA counting on attracting?

5.   How often will the flight be operating? (answer: twice, daily)

4. Understanding words in context:

1.   When the news anchor says that BA are “flying in the face of the recession and the environmental campaigners”, she means:

a.   that BA is trying to disregard  the recession and is irritating environmental protesters, b. that BA are out of recession and are fighting environmentalists, c. that BA has demonstrated sky-high revenues and helps the environment (Answer: a)

2.   When she says that according to the environmentalists, BA is acting hypocritical, she means that: a. BA promised to cut emissions, but is now backing out to make more profit, b. BA is lying about cutting emissions, c. BA wants to increase emissions (Answer: a)

3.   When Willie Walsh says that opening this flight is “ a statement of confidence” about the future of the industry, he means that: a. luxury travel is booming, b. the industry may be on the rise again, c. he is confident  (Answer: b)

4.   When the news anchor asks whether BA would be “cannibalizing their existing business coming out of Heathrow” by starting luxury flight operations, he means that: a. BA would use some of the older planes and their spare parts to upgrade their luxury new planes, b. their new business model would require them to hurt their own business operations in Heathrow, c. BA would destroy its own business (Answer: b)

5.   When Willie Walsh says they are planning to reduce capacity from Heathrow, he means that: a. they will reduce their communication with Heathrow, b. they will reduce the number of flights going out of Heathrow towards JFK, c. they will redirect some of their older planes from Heathrow. (Answer: b)

5. Look through the script and fill in the gaps where necessary using the words below:

 

·        maiden flight

·        recession

·        business-only

·        operations

·        stage

·        hypocrisy

·        campaigners

·        customized

·        to pledge

British Airways are flying in the face of the ………………………(answer: recession) and the environmental…………………………….(answer: campaigners) as well, with its latest offering  – a twice- daily………………………(answer: business-only) service from London to New York. The flight will operate on specially ………………….(answer: customized) Airbus 318s and will accommodate just 32 passengers. Under normal ………………………..(answer: operations) a plane can fit up to 100 seats. Tickets will cost upward of 2000 pounds, but environmental campaigners accuse BA of …………………(answer: hypocrisy) just days after it ……………………. (answer: pledged) to cut emissions. Environmental group “Plane Stupid” will ……………… (answer: stage) a protest at London City Airport tomorrow to coincide with the ……………..(answer: maiden flight).  

6. Look through the script of Willie Walsh’s responses below and complete the sentences rephrasing the words in bold:

WW:  I think it’s a very bold and a 1. forward-thinking move by British Airways  – it’s what people expect of us. I think it’s a statement of 2. assurance defining the industry, the future of the industry, and British Airways is part of that industry so we believe this will be a fantastic commercial and financial 3. achievement for British Airways.

WW: Absolute fuel emission from this aircraft is a 4. small part of the aircraft that fly traditionally on the transatlantic (routes). This one will emit about 25% of a 747. And what we are doing is we are pacing  long-haul services from other London airports with this unique business class service out of London City. And it is important to also point out that we are 5. aiming at people who are currently hopping on executive jets, so the performance of this aircraft is significantly superior to the target market that we have. So we believe that this is part of our 6. method to improving our performance. But I remain absolutely 7. loyal to the rules that are set for the industry and the British Airways.

Answers: 1 innovative, 2 confidence, 3 success, 4 fraction, 5 targeting, 6 approach, 7 committed

 

 

 

 

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