BA admits OpenSkies is worse than budget
British Airways has admitted that its new OpenSkies subsidiary, flying from major European cities to America, is performing below budget and indefinitely postponed plans to add a fifth aircraft to its fleet.
By Alistair Osborne, Business Editor
Last Updated: 12:58PM GMT 29 Oct 2008
In an internal memo, BA warned: "At OpenSkies, revenues are below target through a combination of lower volumes and yields, and as a priority we must take actions to ensure we keep within our cash reserves."
BA set up the new carrier to capitalise on the new "open skies" treaty allowing direct flights between the European Union and the US – though its launch was marred by strike threats, later dropped, from BA pilots.
The new subsidiary marked the first time BA had operated direct long-haul flights between continental Europe and America.
The first OpenSkies service, flying daily from Paris Orly to New York JFK, was launched in June and only weeks later BA unveiled plans to accelerate its growth through the £54m purchase of French all-business class airline L'Avion.
That deal, which included L'Avion's £26m net cash, brought two more Boeing 757 aircraft and extra slots at Orly.
A fourth plane was added earlier this month to launch a second OpenSkies route between Amsterdam and New York JFK, with a fifth Boeing 757 earmarked for service next March. BA has now told staff that no more planes will be added until the economic environment improves.
A BA spokesman declined to comment on passenger numbers or revenues, saying they were "commercially confidential", but admitted: "Like all airlines, OpenSkies is facing challenging trading conditions."
Gert Zonneveld, an analyst at Panmure Gordon, said: "I think it's tough going. It's not a great time to break into these markets."
Meanwhile, BA yesterday agreed to pay a A$5m (£2m) fine to settle charges brought by Australia's Competition and Consumer Commission over alleged price-fixing on cargo fuel surcharges. Australian carrier Qantas will pay A$20m.
BA said the sum would be paid out of a £350m provision for price-fixing allegations, most of which has now been spent.
It added it was co-operating in further investigations in "a number of jurisdictions including the EU, Canada and New Zealand". BA shares fell 6.6 to 117.9p.
Daily Telegraph
http://www.telegraph.co.uk/finance/...BA-admits-OpenSkies-is-worse-than-budget.html
Vedo quindi molto molto lontano il ventilato MXP-JFK di Openskies...
British Airways has admitted that its new OpenSkies subsidiary, flying from major European cities to America, is performing below budget and indefinitely postponed plans to add a fifth aircraft to its fleet.
By Alistair Osborne, Business Editor
Last Updated: 12:58PM GMT 29 Oct 2008
In an internal memo, BA warned: "At OpenSkies, revenues are below target through a combination of lower volumes and yields, and as a priority we must take actions to ensure we keep within our cash reserves."
BA set up the new carrier to capitalise on the new "open skies" treaty allowing direct flights between the European Union and the US – though its launch was marred by strike threats, later dropped, from BA pilots.
The new subsidiary marked the first time BA had operated direct long-haul flights between continental Europe and America.
The first OpenSkies service, flying daily from Paris Orly to New York JFK, was launched in June and only weeks later BA unveiled plans to accelerate its growth through the £54m purchase of French all-business class airline L'Avion.
That deal, which included L'Avion's £26m net cash, brought two more Boeing 757 aircraft and extra slots at Orly.
A fourth plane was added earlier this month to launch a second OpenSkies route between Amsterdam and New York JFK, with a fifth Boeing 757 earmarked for service next March. BA has now told staff that no more planes will be added until the economic environment improves.
A BA spokesman declined to comment on passenger numbers or revenues, saying they were "commercially confidential", but admitted: "Like all airlines, OpenSkies is facing challenging trading conditions."
Gert Zonneveld, an analyst at Panmure Gordon, said: "I think it's tough going. It's not a great time to break into these markets."
Meanwhile, BA yesterday agreed to pay a A$5m (£2m) fine to settle charges brought by Australia's Competition and Consumer Commission over alleged price-fixing on cargo fuel surcharges. Australian carrier Qantas will pay A$20m.
BA said the sum would be paid out of a £350m provision for price-fixing allegations, most of which has now been spent.
It added it was co-operating in further investigations in "a number of jurisdictions including the EU, Canada and New Zealand". BA shares fell 6.6 to 117.9p.
Daily Telegraph
http://www.telegraph.co.uk/finance/...BA-admits-OpenSkies-is-worse-than-budget.html
Vedo quindi molto molto lontano il ventilato MXP-JFK di Openskies...
