BA cancels 1,000 flights to cut 'no frills' losses subsidiary

British Airways is to cancel more than 1,000 loss-making flights over the next three weeks, leaving tens of thousands of travellers stranded.

Each of the targeted routes is believed to be losing at least £1m a year, and the airline has concluded it will cost less to compensate passengers who have already booked, and to pay crew to stay at home, than it will to operate the aircraft.

An estimated 30,000 passengers who have already booked will be affected by the cuts, which start today.

The abrupt cuts to flights from Birmingham, Manchester and Scottish airports are necessary "to protect the ongoing viability of the business," BA said in a terse statement.

The business in question is BA Connect, whose slogan is "Low fares - same great service". It was launched a year ago as a no-frills subsidiary in an attempt to stem losses from BA's regional services.

The attempt failed: BA Connect is believed to be losing around £100,000 a day. In its half-year results, BA took a one-off financial hit of £106m for BA Connect, and said it would offload the operation to Flybe, the UK's biggest regional airline. That deal is expected to be confirmed this morning.

BA has struggled to profit from short-haul operations. The growth of low-cost carriers in the past decade has hit BA harder than any other large European airline. In effect, BA is now paying Flybe more than £100m to take the loss-making operation off its hands.

Flybe said: "BA will ensure that the new business has sufficient funding to achieve its growth targets and the transition out of the current BA Connect fleet."

BA's chief executive, Willie Walsh, has said that the subsidiary's routes were "not a strategic part of our business", adding: "Such activities are better undertaken by a regional, low-cost airline."

Pilots, cabin crew and engineers are to be offered posts with Flybe, but ground staff and management will be affected - resulting in a few hundred job losses from BA Connect's 2,800 personnel.

The move comes three weeks before the summer schedules begin on 25 March. None of the axed routes is expected to be resurrected for the summer. Flybe said it would retain only 35 routes, and none of the aircraft, from BA Connect. The summer timetables will show sharp reductions in overall services from UK regional airports, particularly where BA Connect and Flybe's routes overlap. But BA's sudden decision to cancel more than 1,000 flights in advance of the handover was unexpected. They include business routes such as Birmingham to Frankfurt, Bristol to Zurich and Manchester to Berlin. "All of the routes being cancelled are substantial loss-makers for the current BA Connect business," BA said.

While all airlines lose money on certain departures, known as "dog flights", it is unprecedented for a profitable national carrier to axe so many services.

Passengers have been offered a range of options, from a full refund to making the same journey using connecting flights via London on BA.