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Why London Always Matters to Americans
November 2, 2017 --Want to know why London will always matter to American travelers?
Try this: About 4,440 passengers a day are considered "premium" market flyers at London/Heathrow, more than any other airport in the world.
Or this: About 3,900 passengers a day are considered "premium" flyers at Newark and Kennedy, the New York area's two international airports.
See where I'm going here? The run between New York and London, connecting the highest-yield markets in the world, even has its own name. Despite the recent growth of intra-Asia and Gulf markets, the so-called NyLon run remains the one route to rule them all.
I've been writing about the primacy of the NyLon route for a long time. In 2008, a chunk of the Brancatelli File was titled Why NyLon matters. "If you don't travel between New York and London, you might wonder what the hubbub is about," I wrote. "According to Britain's civil aviation authorities, 1.4 million passengers flew between the United States and the United Kingdom in March. Almost 25 percent (349,000) of them flew between New York and London."
(By the way, the map is from 1948. At the time, Heath Row was still a farming community and embryonic Heathrow, opened for commercial traffic in 1946, was called "London Airport.")
It's not just the volume of flyers on the NyLon route, but that concentration of premium travelers. When global financial markets melted down, I wrote a column called A Run on the Bankers. The focus? The rapid decline of high-yield flyers between London and New York due to the obliteration of investment banking. Two years later, in a column entitled The NyLon Route in a Knot, we discussed how traffic had yet to recover. The repercussions warped the entire transatlantic market.
The combination of the high volume and the high yield between London and New York has always been a honeypot for airline entrepreneurs. Over and over, they've tried to launch all-premium class airlines and almost all of them have started by flying to London. The fact that all of them failed was the focus of a column called All Business, Always Trouble. Within a concentrated period in the late aughts, three premium-class start-ups focused on London--MaxJet, EOS and SilverJet--collapsed as oil prices skyrocketed. No all-premium carrier has tried since. And when La Compagnie, a Paris all-business-class start-up, added a Newark-London/Luton route several years ago, it, too, failed.
But it's wrong to suggest London will always matter solely because of the New York-London route. All transatlantic roads lead to London. As I explained in Tactical Traveler in 2013, eight of the ten busiest routes between the United States and Europe touch London. And when the European Union finally liberalized air traffic, guess where the world wanted to fly? London, of course.
Yet London airports in general, and Heathrow Airport in specific, are problematic. Heathrow's 20-years-in-the-making Terminal 5 metaphorically collapsed the day it opened in 2008. Heathrow's reputation hasn't really recovered in the intervening decade. And London continues to fight over the next step for the city's aviation infrastructure. One London mayor even wanted to build a new airport on islands in the middle of the Thames.
The islands-in-the-stream plan didn't, um, fly and London authorities have settled on a third runway for Heathrow. The plan will cost billions of pounds and take perhaps 20 years to clear the political, geographic and construction hurdles. But British Airways' persnickety boss, Willie Walsh, doesn't want to pay and refuses to wait.
In 2015, Walsh hit upon a cheaper, faster scheme: Buy his former airline, Ireland's Aer Lingus, and turn its Dublin hub into an alternate London airport. The theory: Move connecting traffic via Dublin to leave more of Heathrow's existing capacity for London-bound traffic. (That's called O&D, origin and destination, traffic in airline parlance.)
By the end of 2015, Aer Lingus was expanding rapidly. British Airways has been growing, too, but mostly concentrating on flooding the zone in major U.S. markets and directing at least some of the new traffic to Gatwick rather than Heathrow.
BA isn't the only airline that wants a piece of London, though. To combat BA's alliance with American Airlines, Delta Air Lines purchased 49 percent of Virgin Atlantic late in 2012. It has been working assiduously to build Virgin into a strong transatlantic force as a counterbalance to British Airways. BA and American continue to claim the largest chunk of the Anglo-American market, Delta's Virgin move has turned it into a solid Number 2.
If there is a cloud over London's future, however, it is Brexit. There is a plentitude of evidence to suggest London will matter less globally if the United Kingdom does leave the European Union.
Ironically, should Brexit sour the ties between Britain and continental Europe, the traditional alliance between the United States and Britain will only become more important. And with the so-called "special relationship" comes a nearly laser-like focus on London for U.S. travelers. Because, let's be honest, there'll always be a Heathrow.
This column is Copyright © 2017 by Joe Brancatelli. JoeSentMe.com is Copyright © 2017 by Joe Brancatelli. All rights reserved. All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.