BA to cut seats to US

BRITISH AIRWAYS will an-nounce a 12 per cent cut in the number of seats available on its transatlantic flights over the next three years in a bid to shore up profits and comfort investors.

City analysts are expecting an 85 per cent drop in the company's pre- tax operating profits for the first three months of the year, to pounds 22m from pounds 145m in the same period of 1998. Including exceptional gains, however, overall profits are expected to have risen by around 28 per cent, according to a Bloomberg straw poll.

BA blames a surge in the number of seats and flights being offered by rival airlines on busy routes from Europe to the US for the company's poor performance, forcing it to slash prices to compete. "We are seeing capacity increase across the Atlantic completely out of line with expected demand," BA's chief executive Bob Ayling told The Independent on Sunday. "It is effective dumping, but there is nothing we can do because it is an absolutely free market."

According to BA, Dutch airline KLM was offering seats from Paris to New York last week for the rock-bottom fare of pounds 150. "No one in the world can afford to offer that fare and still invest in new planes for the future," said Mr Ayling.

Over the past year, Lufthansa has increased capacity on its transatlantic routes by 21.7 per cent, Spain's Iberia by 15.2 per cent, and Alitalia by 9.3 per cent. "We are focusing on the most profitable area of our business, which is essentially premium and full-fare economy seats," said a BA spokesman. "Transatlantic routes account for around 40 per cent of all BA flights.

BA's bad news on profits follows the decision by US regulators last week not to allow the airline's planned link-up with American Airlines after a three-year investigation in Washington and Brussels. Meanwhile other cost-saving alliances such as the Star Alliance, led by Lufthansa are forging ahead.

As a condition for approving the alliance, EU and US regulators wanted BA to give up take-off and landing slots at Gatwick and Heathrow - a move BA estimated would have cost it more than pounds 250m a year.

A spokesman for Virgin Atlantic dismissed claims that increased capacity by its competitors was the reason for BA's woes. "BA and AA are the two companies that have increased capacity since 1996. As it became evident they would have to give up slots they have been piling on capacity."

"They (BA) are simply talking about cutting back to the levels they had before."

He said Virgin was expecting to see pre-tax profits rise to pounds 96m from pounds 89m last year. Virgin has also increased capacity over the past year, putting on extra flights to Los Angeles, New York and Miami. "We are selling all the seats, and we are filling the planes."

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Voices
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Sport
Steve Bruce and Gus Poyet clash
football
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths surrounding the enigmatic singer
Sport
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Life and Style
life
ebooks
ebooksA special investigation by Andy McSmith
Sport
Christian Benteke of Aston Villa celebrates scoring the winner for Aston Villa
football
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
News
Bill O'Reilly attends The Hollywood Reporter 35 Most Powerful People In Media Celebration at The Four Seasons Restaurant on April 16, 2014 in New York City
media It is the second time he and the channel have clarified statements
News
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn