British Airways new daily service between Gibraltar and London Gatwick

A senior British Airways’ executive said the airline’s new daily service between Gibraltar and London Gatwick was performing well despite the impact of rising fuel costs and global economic turmoil.
The airline launched the service earlier this year following the takeover of former franchise partner GB Airways by low cost carrier easyJet.
The buyout means there are now three airlines – Monarch is the third – serving the Rock on routes to the UK. That translates into increased competition, but the signs are that there is sufficient demand to keep all three carriers interested.
BA has a policy of not disclosing specific occupancy levels for individual routes, but Jordi Porcel, the company’s Madrid-based director for Gibraltar, Spain and Portugal, emphasised that the Gibraltar-Gatwick service was “performing very, very well.”
“The only thing I can say is that occupancy levels on the route are extremely high, both in terms of the accumulated figure from the start of the operation and during the summer, when the planes have been practically full for every flight during July and August,” he told B2B.
“It’s also worth noting that there is a balance in passenger numbers in both directions on the service, which is important.”
The local market and business travellers provide BA with a year-round client base that peaks during the summer months with the influx of holiday makers heading from the UK to destinations on the Costa del Sol. Although BA serves Malaga with three daily flights to the UK, the airline has found that for passengers heading to destinations at the southern end of the Costa, Gibraltar continues to be the preferred point of entry and departure.
“The evolution of the Gibraltar service since its launch earlier this year would, on the face of it, suggest that there may be the need to expand capacity on the route in the near future,” he said.
“But we have to put this into the context of the current economic climate and the high price of fuel, and these are decisions that we are constantly reviewing.”
Mr Porcel said the current economic climate – in particular the high cost of fuel – would condition the airline’s strategy of developing its existing services or establishing routes across its entire global network, including, of course, the Rock.
Willie Walsh, BA’s Chief Executive, has warned the group is “in the worst trading environment the industry has ever faced.”
Faced with this economic uncertainty, BA recently took the decision to reduce capacity on a number of its existing routes, seeking fuel efficiency and putting on hold plans for several new services including links between London and Valencia, in Spain, and Porto, in Portugal.
“Right now, we are not considering any changes to the Gibraltar service,” Mr Porcel said.
“We are seeking a balance between the number and frequency of fights and the fact that each service is more expensive to operate now than it was before, so we are opting to be very cautious at a time when we are reducing our global capacity by around 6% for the forthcoming winter schedule.”
“We are not looking at Gibraltar in isolation, but at the entirety of our global network.” When it comes to pricing, there are two key factors that impact on how much the passenger ultimately has to pay for a flight.
On the one hand is the price of the basic service. On the other is the fuel surcharge added on to that price, the latter being subject to seasonal fluctuations depending on the price of oil.
The underlying reality of air travel in the present climate – and one reflected by Mr Walsh earlier this summer – is that flying is no longer going to be cheap. The rising cost of fuel is a factor that affects all airlines and which, ultimately, will be reflected in the price of any air ticket.
Mr Porcel said that BA’s strategy was to remain competitive when compared to rival carriers, both in terms of pricing and in terms of the value-added services it offers to customers.
“But logically, the higher operating costs will have to be reflected in the final price paid by the passenger,” he said.
The nature of a short-haul flight means that at a basic level, the service offered by all the carriers is essentially the same. Cabin layouts are similar, as is customer experience. How then does BA differentiate its product, particularly in a market that, following the buyout of GB Airways by easyJet, has become more competitive? Where once there were just two airlines serving the Gibraltar-London route, now there are three companies fighting for the lion’s share of the market.
At a basic level, there is one key difference. BA is the only company serving Gibraltar that offers passengers a full in-flight service, providing complimentary food and drink. It is also the only carrier offering a two-cabin service, with Club Europe passengers – mainly business people and wealthy travellers – enjoying a more sophisticated product that comes at a premium.
“But we’re not only talking about the hard, on-board product, though this remains important and we believe that our service goes further than what is offered by our competitors in Gibraltar,” Mr Porcel said. “We are talking about a much broader range of services that we offer.”
BA flights, Mr Porcel said, could be purchased both online and via traditional travel agents. The company’s web page offers customers numerous add-ons in a way that is completely transparent in terms of pricing and accessibility. Also crucial was the seamless access that BA offered to a global network operated both directly and in conjunction with its partners within the OneWorld alliance. Through a single point of contact, passengers could tap into a vast range of services to  myriad destinations worldwide.
“In simple terms, your alliance partners can carry your passengers to those destinations which you aren’t flying to,” he said. “It’s a very important distinction.”
“All those services that we offer are included in the price paid by the passenger, whereas many of our competing companies charge separately for this, from things like boarding a plane to additional baggage.”
“We accept that on many occasions, we may not be the cheapest, but we are n nonetheless tremendously competitive when you consider what is included in the final price paid by the client.”
“The transparency of our pricing is also important, because the passenger knows at every moment what is included in the fare, and what his rights are.”
Mr Porcel said the company’s long-term plans for Gibraltar would largely depend on the evolution of oil prices in the coming years.
But he was excited about the change underway at Gibraltar Airport and the scope to develop new business on the back of this.
The planned expansion at Gibraltar airport following the Cordoba Agreement is “more than welcome,” Mr Porcel said. “It’s going to be a huge change at every level, and the only thing that will come about as a result of this, is an improvement in customer experience and the chance of attracting new operators, that is evident,” he said.
“As for Gibraltar itself, it will boost its influence in southern Iberia, not as a rival to other airports, but as a complement.”
Rather than assessing this from the point of view of two or more airports competing for the same passengers, airlines like BA consider the global picture and how a wider range of services to several regional destinations can help them offer a broader choice and greater flexibility to customers.
“That’s how we see it,” Mr Porcel added. “We are always looking at how airports complement each other, both in terms of pricing and services.”
He said that relations with the authorities in Gibraltar were very good and that there was an understanding on the Rock of the need to balance practical issues such as landing fees – recently reduced by the Gibraltar Government – against the wider economic context that the airlines were operating in, and the need to invest in infrastructure to improve what was on offer.
“That is a balance that authorities in Gibraltar now understand,” he added.

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