30 APRIL 2012

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Article from BTNews 30 APRIL 2012

COMMENT: Thomson beats BA (and the taxman)

They must have been somewhat startled both at Waterside and 11 Downing Street when Thomson Airways (once called Britannia) unveiled what might prove to be the definitive Boeing 787 Dreamliner cabin at Manchester Airport last week. 

What Thomson has produced is a “Premier Economy” product with a 38” seat pitch (and many other quality innovations) that meets the criteria for ‘standard’ tax.. 

Not only is the new cabin likely to become a real cash cow for the airline but it is a significant gesture at both at British Airways and the Treasury. 

BA will of course say it is not a competitor for its own 787 Economy plus interior, and the bean counters  at the Exchequer will go away and think of another way of changing the rules, as they always do (APD was introduced as an environmental tax).

But a 38” pitch improved economy product, up to 39.99” under the rules, could become the norm for airlines attempting to offer a better grade (and more expensive) cabin and not wishing to be trapped by the taxman.  The problem is that any change of layout, either in a new aircraft or one being refurbished, takes time to plan and even longer to implement.  The Treasury can change the rules overnight.

No doubt some time later this year we will learn of British Airways plans for the Boeing 787, and indeed Airbus A380.  Will the airline try to beat Mr Osborne or just go for a superior Premium Economy 40” plus product?  Will First remain branded “as is”, become First Suite, or be offered with some other label (we’ve suggested Concorde Class – it sounds superior)? 

Well done Thomson.  Is the Treasury going to send inspectors out to measure every seat on every aircraft?  Or will they change the rules once again?

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