Outlook: An airline without any aircraft

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BOB AYLING is trying hard to forget that he once dreamt of turning British Airways into a virtual airline. The concept looked good on paper but in practice it shattered morale because staff understandably took it as a euphemism for redundancy. What are we to make, therefore, of the BA chief executive's latest vision - an airline without any aircraft?

BA has asked Boeing and Airbus to come up with "innovative" ways of delivering pounds 2bn worth of new jets. In plain man's language, what BA wants is to get the use of the aircraft without also being lumbered with the cost of ownership. It is an inevitably development. Why have big lumpy assets like aircraft weighing down the balance sheet when an airline has so many other calls on its investment programme?

Operating leases have long been fashionable as a means of supplying aircraft and BA itself has been at the cutting edge of new financing wheezes such as taking "put" options on jets and engines. Now it looks like going one step further and offloading all the costs of ownership, including residual valuations, back onto manufacturers in exchange for a straight rental payment. Others may not find it quite so easy to do. But BA is big enough to ensure that Boeing and Airbus will not be short of innovative ideas.

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