BA's European business class gets pounds 70m revamp

BRITISH Airways is to relaunch its European business class service at a cost of pounds 70m to fend off competition from the Channel Tunnel and rival airlines, writes Russell Hotten.

Sir Colin Marshall, chairman, who was yesterday forced to defend BA's investment in troubled USAir, said improvements to Club Europe would be accompanied by its most intensive promotion the company had undertaken.

The move comes at a time of fierce price-cutting in the airline industry, which will face additional problems when the Channel Tunnel's Eurostar services begin.

Some analysts believe Eurostar could eventually wipe out the London-Paris air market - the busiest route in the world - and severely dent services to other key European cities. About 3 million passengers have flown London-Paris in the past 12 months.

The new Club Europe service includes reducing the number of business class seats to give extra passenger space. One air industry expert questioned whether BA would be able to capture enough additional passengers to make it worthwhile. Sir Colin said the new service would not mean higher business class fares. However, the analyst said: 'Airlines have cut back and margins are being squeezed. But BA's business class was due for an upgrade and this is the time to do it, before Eurotunnel services get under way.'

Eurostar should have started in early summer but was delayed while Eurotunnel obtained necessary safety clearances - which gave BA and other carriers an extra summer to prepare.

Last year BA spent pounds 100m improving its long-haul business class. This helped the company to improve high-yield first and business class passenger traffic by 12 per cent.

Yesterday, Sir Colin had to defend BA's 24.6 per cent stake in USAir, the American carrier whose Boeing 737-300 crashed last week killing 132 people. Sir Colin said USAir would contribute pounds 70m in revenues to BA this year. 'The crash will not lead us to reconsider our US investment.' He praised the professionalism and integrity of USAir's safety procedures.

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