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Transatlantic Battle Intensifies.

Article Excerpt
Additional capacity and frequency from Eos, Maxjet and Silverjet--the all-business-class airlines serving the New York-London route--have grown to meaningful enough proportions to affect corporate pricing and alter marketshare. Carriers of all stripes said demand remains robust on the route, as capacity between New York and London continues to grow at double-digit annual rates.

The niche carriers have reached a tipping point in the corporate market, said JP Morgan European Equity Research airline analyst Chris Avery in a research note. "With this level of capacity, we believe that these all-business-class carriers will be starting to affect corporate fares as well as taking marketshare in the premium leisure market between the two cities," he said. "Certainly, at a minimum we think they will be preventing any increase in existing business class fares between London and New York, and we have--so far limited--evidence that corporate fares are actually being reduced because of the growing competition."

JP Morgan in a research note said that, upon the launch of Silverjet's second daily frequency this month, the all-business class carriers will hold 21 percent of all premium seats on the New York-London route. The figure does not include Eos' fourth daily flight, to launch in September.

Niche carriers operating between New York and London jumped in to the market in late 2005, with Eos and...

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