BA may ditch OpenSkies as transatlantic flights dive
Richard Wachman The Observer, Sunday 21 June 2009
British Airways is considering ditching its OpenSkies subsidiary, which operates flights from Paris and Amsterdam to the US, in a move that would reflect the ongoing severity of the recession and slump in business passengers on transatlantic routes.
Scrapping the operation would represent a dramatic volte face for the group, which only a year ago acquired a French airline, L'Avion, for £54m as part of plans to increase flights between France and America. The acquisition followed an Open Skies treaty that allowed EU operators to fly to the US from any European country, not just their country of origin.
The BA subsidiary was named after the 2008 treaty, signed by the US and EU after years of negotiations, and was launched last summer by chief executive Willie Walsh.
Walsh was so keen to establish the OpenSkies business that he risked a strike by one of the company's most powerful unions, the British Airline Pilots' Association (Balpa), which objected to the new pilots being hired on less attractive terms than colleagues at BA's main operation. The wrangle went to the high court, but Balpa withdrew because of the high costs linked to a prolonged legal dispute.
City sources say BA is now actively considering winding up or selling OpenSkies as it seeks to slash costs.
A BA spokesman would not be drawn on its plans for OpenSkies but said: "Every part of our business is under review in these difficult and challenging times."
One analyst said that to abandon its OpenSkies division would be a blow to BA's prestige more than anything else, as the subsidiary is a relatively small part of the group with only four aircraft.
Last October, BA said OpenSkies was running below budget and it was cancelling plans for a fifth aircraft. BA could eventually sell the four Boeing 757s that make up the operation, flying from Orly Paris and Schiphol Amsterdam.
A number of other airlines, including Air France, have launched transatlantic routes since the treaty came into effect, but all are chalking up losses.
(The Guardian)
Richard Wachman The Observer, Sunday 21 June 2009
British Airways is considering ditching its OpenSkies subsidiary, which operates flights from Paris and Amsterdam to the US, in a move that would reflect the ongoing severity of the recession and slump in business passengers on transatlantic routes.
Scrapping the operation would represent a dramatic volte face for the group, which only a year ago acquired a French airline, L'Avion, for £54m as part of plans to increase flights between France and America. The acquisition followed an Open Skies treaty that allowed EU operators to fly to the US from any European country, not just their country of origin.
The BA subsidiary was named after the 2008 treaty, signed by the US and EU after years of negotiations, and was launched last summer by chief executive Willie Walsh.
Walsh was so keen to establish the OpenSkies business that he risked a strike by one of the company's most powerful unions, the British Airline Pilots' Association (Balpa), which objected to the new pilots being hired on less attractive terms than colleagues at BA's main operation. The wrangle went to the high court, but Balpa withdrew because of the high costs linked to a prolonged legal dispute.
City sources say BA is now actively considering winding up or selling OpenSkies as it seeks to slash costs.
A BA spokesman would not be drawn on its plans for OpenSkies but said: "Every part of our business is under review in these difficult and challenging times."
One analyst said that to abandon its OpenSkies division would be a blow to BA's prestige more than anything else, as the subsidiary is a relatively small part of the group with only four aircraft.
Last October, BA said OpenSkies was running below budget and it was cancelling plans for a fifth aircraft. BA could eventually sell the four Boeing 757s that make up the operation, flying from Orly Paris and Schiphol Amsterdam.
A number of other airlines, including Air France, have launched transatlantic routes since the treaty came into effect, but all are chalking up losses.
(The Guardian)
