Airline battle over London to New York route hots up


The battle between American and British airlines over the industry’s most lucrative route, London to New York , is set to intensify as US carriers push through major revamps of their business- and first-class cabins.

United Airlines has released new details of a $165m business-class and first-class cabin refurbishment that will include 15in flat-screen televisions, lie-flat beds, and the capability to use iPods with the on-board entertainment system. The upgrade has been a long time coming. British Airways and Virgin Atlantic have long enjoyed a critical advantage over the American carriers’ offerings for transatlantic premium passengers.

It is fiercely guarded turf. Douglas McNeill, an analyst at Blue Oar Securities, said that nearly half of British Airways profits come from premium trans-atlantic customers. Every percent rise in business and first class fares, he said, translates to an equal increase in profits for the carrier. “BA and Virgin are very much at the top end of the market. The Americans are at the low end, and that is the way they are perceived by customers,” he said.

This is, in part, due to the American industry’s years of poor health. United and Delta Airlines were forced into lengthy bankruptcies in the wake of the September 11 terrorist attacks, while American Airlines narrowly avoided it but had to make severe cuts to survive. They are now healthy and profitable but must play catch-up after years of cutting costs.

The competition to win those passengers is intense. Each airline touts the smallest of details – that extra inch of leg room, a more comprehensive wine selection, more comfortable seats – that may sway a big spending customer. Indeed, last year Virgin Atlantic sued the designer of its Herringbone seat after similar-shaped seats began appearing in the cabins of rival carriers.

American Airlines has refitted about a fifth of its 47-strong fleet of 777s – the first such upgrade since 1999 – that fly from Heathrow to destinations in America including New York, Los Angeles and Miami. The carrier hopes to have the entire fleet upgraded by this summer.

An American spokesman said: “Back in the 90s, a business-class seat had a lifetime of probably ten years. Today that has more than halved. Virgin is already in its second iteration of its lie-flat sleeper. This is a very fast moving part of the industry.”

Paul Charles, head of communications at Virgin Atlantic, was dismissive of the Americans’ efforts. “They are trying to play catch up. The Americans have never been able to match us on innovation and new products. It will be many, many years before they catch up.”