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British Airways Reviews Makeup of London Gatwick Fleet

British Airways (IAG) could add more wide- body planes at London’s Gatwick airport in a review of capacity at a base dominated by aging single-aisle jets that generate lower profit margins than operations at its main Heathrow hub.

BA is turning to Gatwick’s fleet makeup after reducing its cost base there through an outsourcing strategy, said Silla Maizey, the carrier’s managing director for the airport.

“Gatwick can accommodate all plane types so it just depends on meeting needs of our customers and where demand is,” Maizey said in an interview. “That’s a long time ahead and we are still in the process of planning out which planes go where and when.”

BA’s Gatwick fleet features 19 Boeing Co. (BA) 737-400 single- aisle planes dating from 1990 and deployed mainly within Europe, aided by Airbus SAS (EAD) A320-series jets drafted from Heathrow for the summer peak, plus nine Boeing 777 wide-bodies used on long- haul leisure routes. Upgrades mean that from 2013 Gatwick will be able to handle Airbus’s A380, the world’s largest passenger plane, due to enter the BA fleet at Heathrow from July.

The U.K. unit of International Consolidated Airlines Group SA has recently implemented cuts at Gatwick that involved the outsourcing of 400 ground-service posts in areas such as baggage handling and de-icing. The carrier has also eliminated about 120 jobs in customer services and 50 in management and support and employs around 1,500 people at Gatwick out of 36,000 in total.

EasyJet Pressure

“We’ve been able to reduce down manpower and our cost base is now very competitive,” Maizey said, adding that BA is wedded to retaining short-haul flying at Gatwick, where it has faced a squeeze from companies including EasyJet Plc (EZJ), the U.K.’s biggest discount airline and the airport’s No. 1 operator.

BA’s Gatwick services offer lower margins than those at Heathrow because of the shorter distances involved and the focus on leisure routes that don’t require the connections available for business travelers at its main base.

An advertising campaign begun this month highlights service improvements at Gatwick since Global Infrastructure Partners Ltd. bought the airport in 2009, Maizey said. Four TV ads also stress BA’s baggage allowance, free seat bookings and in-flight refreshments to cities such as Amsterdam and Bordeaux, seeking to differentiate it from EasyJet and Ryanair Holdings Plc. (RYA)

Wide-Body Plans

Still, the carrier has added inter-continental trips where viable, and Maizey spoke before the departure of BA’s first flight from Gatwick to Las Vegas, the only long-haul destination served from its two main London bases. BA becomes top carrier to the U.S. city from the U.K. with 10 weekly return trips, passing Richard Branson’s Virgin Atlantic Airways Ltd., which has nine.

BA could have wide-bodies available for transfer to Gatwick from Heathrow following an over-haul of its long-haul fleet that includes the arrival of 12 A380s and 24 Boeing 787-8s due for delivery starting in May.

The company will also assess the A350-1000, the biggest version of Airbus’s latest wide-body plane, and Boeing’s stretched 787-10 and re-winged 777-X, fleet manager Alexander Grant said last year. Those models are candidates for the replacement of 52 Boeing 747s -- comprising the largest jumbo fleet -- BA chief executive officer Keith Williams said Oct. 15.

IAG could spend 1.5 billion euros ($1.9 billion) a year through 2020 to trim the average age of BA’s fleet to eight years by 2016 from 11 now, HSBC analysts said this month. Spending could be lower if the company retires aircraft later or buys used Boeing 777s or Airbus A330s, they said in a note.

Gatwick, the world’s busiest single-runway airport, also plans to enhance its appeal to airlines by exploring the possibility of adding a second landing strip after 2019, CEO Stewart Wingate said in a statement on Oct. 17.

To contact the reporter on this story: Tom Metcalf in London at tmetcalf7@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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