Low-cost transatlantic airlines plot a comeback

New York, Central Park – Ingus Kruklitis/iStockphoto

The US is back. In less than two months, Britons will once again be able to enjoy family holidays in Florida, a shopping weekend in New York City or a road trip along the California coast.

Monday’s announcement that the US would lift its travel ban on UK and European travellers brought a surge in interest. Virgin Atlantic said bookings rose by 600 per cent on the night following the update, compared to the same time the previous week. New York was the most popular destination.

Yet, as ever, booking a transatlantic flight would come at a cost. As of Thursday, you could secure a return economy ticket with British Airways for £374.77 on the last weekend of November. That would buy you, based on current prices, 18 return flights to Rome with a budget carrier.

As the long lost Laker Airways first proved: there’s appetite for low-cost connections between the two counties. It folded in 1982, pushed out of business with the help of its competitors. Norwegian Air, its clearest successor, announced in January that it would be scrapping its budget transatlantic routes following its financial woes during the pandemic.

Sheer demand has led others to take on the challenge. Take the BA service from Heathrow to New York’s JFK airport – pre-pandemic, it was the airline’s only billion-dollar route, according to OAG.

Indeed, alongside families separated by the ban, traditional airlines were among those most enthusiastic about Biden’s ruling. The lifting of the 16-month ban will be “a major milestone to the reopening of travel at scale across the Atlantic'', said Shai Weiss, chief executive of Virgin Atlantic.

It may take a while for the passenger numbers to rebound. The total number of flights that ran from the UK to the US between January 1 and September 19 this year was just 8,380, according to data from Cirium. During the same period in 2019, that figure was 35,072. Test costs and Covid-related paperwork, not to mention the threat of further travel restrictions, will hamper a resurgence.

That said, BA saw searches for UK-US flights surge by 700 per cent. This, of course, would’ve been from a tiny base. Up until Monday, Joe Biden refused to offer any encouragement that the ban was soon to be lifted. Britons had little reason to be optimistic that they’d return to the US in 2021.

Despite that, lower-cost carriers were itching to take a slice of traditional airline’s transatlantic profits. Irish carrier Aer Lingus announced shortly after the announcement that In fact, two new startups have applied for US carrier permits. Now that we have a date for our US return, they could see passengers flocking towards their smaller fares in 2022. PLAY and Norse both hope to start their UK-US routes in 2022. The latter will offer “affordable” connections between European cities (including London) and US hubs.

“We believe there is a pent-up demand,” says its founder and chief executive Bjørn Tore Larsen, following the US travel announcement.

“People will once again go on vacation, visit friends and family, and travel for business. Norse Atlantic Airways will be there to offer attractive and affordable flights to the leisure traveller and the cost-conscious business traveller,” he adds.

Many details about what the airline will promise passengers have yet to be confirmed. However, it will operate the same Boeing 787 Dreamliners previously used by Norwegian (senior figures from that airline have helped to start Norse).

John Strickland, aviation consultant, and director of JLS Consulting, says of this: “Norse is using the same larger Boeing 787 as Norwegian but has secured them at about half the lease rate which is a significant cost reduction.”

The link between Norwegian and Norse could give some hints as to what it has planned. When Norwegian started its UK-US flights back in 2015, food, drink, blankets and headsets all came with an extra cost.

Travellers will be given further choice if new Icelandic carrier PLAY secures its US permit. It will run a “hub and spoke system of connecting the US and Europe,” Birgir Jónsson, the airline’s chief executive, says.

London and New York will be connected with a stop in Iceland. This will allow it to run smaller aircraft at a lower cost. It will pass this onto customers.

“[PLAY] is basically a no frills, basic service – good, efficient, friendly and clean,” adds Mr Jónsson. “We don’t have five-star meals, it’s just a modern service.

“Meals will never be included, but you can buy your own food on board, but there’s basically nothing included in the ticket.”

While some have built airlines around the resumption of transatlantic travel, other longstanding carriers have launched UK-US routes even as the ban remained in place.

JetBlue celebrated its inaugural New York to Heathrow route in August and next week will see its first flight landing in Gatwick. It will be the only airline flying between both airports and JFK.

Its “core” customers (the airline’s name for its most affordable price point) will see free wine, beer and spirits, a hot meal and an area where passengers can pick their own snacks and drinks. Entertainment screens are included and leg room is generous.

Mint, JetBlue's premium level, offers lie flat beds complete with sliding door s for extra privacy. The beds are bigger than those of any other US airline.

The most basic option, however, will come with extra charges for hold luggage and advance seat booking.

“Jet Blue will compete with BA/Virgin both for economy and more importantly premium traffic,” says Mr Strickland. “They are only offering a modest capacity level using smaller and efficient Airbus A321 aircraft and initially low frequencies too but I would expect them to seek to build these up.”

These three different models have yet to be trial tested. However, they signal more competition – which can only be welcome by travellers.

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