If you're not having failures, the old business mantra runs, you're not taking enough risks. No one could accuse Willie Walsh of not taking risks with his business airline subsidiary, OpenSkies.
The then-BA chief executive created the airline in summer 2008. That was when BA abandoned flights between Manchester and New York. But with a new subsidiary, OpenSkies, the carrier began a route from Paris to America's largest city.
British Airways was seeking to capitalise on its excellent brand recognition in the US; if you ask Americans to name one foreign airline, it would probably be BA. The airline also has lots of deals with big US corporations.
"We are confident that OpenSkies will have a successful future," said Willie Walsh at the time – even though in the previous few months the three business airlines linking London with New York had gone bust. One month after its launch, BA dug deep to buy a rival start-up, L'Avion, for £50m.
By the end of 2009, according to the original business plan, the airline would serve a total of six key business cities, including Amsterdam, Brussels, Frankfurt and Milan. Only the first of these was tried: after a year of heavy losses, the Amsterdam to New York route was abandoned. Next, a route opened between Paris and Washington DC. At the end of this month that, too, will be abandoned. Seats on the route are being offloaded at way below cost, at the equivalent of £500 return. "We have an extraordinary sale from DC for the month of October," says the airline, with understatement.
News of the Paris-Washington DC route being axed was contained at the foot of a press release headed "OpenSkies Offers iPads on Flights from New York to Paris". The "Schedule Changes" were relegated to an afterthought.
Despite the losses involved in the OpenSkies venture, Willie Walsh is undeterred by rumours that the easyJet founder, Sir Stelios Haji-Ioannou, plans a business airline across the Atlantic. "I would relish the opportunity to compete with him," said the man who is now chief executive for IAG.
Fares war at Gatwick airport
Two days ago, British Airways' new boss, Keith Williams, opened BA's smart new premises at Gatwick. The Sussex airport is now dominated by easyJet, and in a bid to win back passengers BA has just cut fares on key routes where it competes head-to-head, such as Amsterdam, Malaga and Naples.
For the past few years British Airways has retreated at Gatwick, cutting routes and services as easyJet, Ryanair and other low-cost airlines expand. This winter, though, BA has decided to tackle the cheapies on price.
Just how good are the deals? The best way to compare is on head-to-head key routes on BA and easyJet. These fares were researched on 10 October for travel on the cheapest available flight outbound from Gatwick on Friday 18 November, returning Monday 21 November.
The results show how remarkably close the fares are – Amsterdam and Marseille are priced within a couple of pounds, with easyJet substantially cheaper only to Malaga and BA undercutting on the long flight to Naples.
BA's fares include 23kg in checked baggage, plus inflight refreshments; easyJet has no free baggage allowance and fares are subject to a £8 fee for paying with a debit card.Reuse content