Simon Calder: British Airways is a national institution - and that is part of its problem

'It is aware that easyJet, Ryanair and Go are circling, vulture-like, ready to pick up traffic'

In the gloom of a February dusk, the ranks of concrete hangars look ghostly. Each resembles a giant Nissen hut, with one end open to the elements.

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In the gloom of a February dusk, the ranks of concrete hangars look ghostly. Each resembles a giant Nissen hut, with one end open to the elements. That is the strange sight that will greet the pioneering aviators from Dorset when they touch down at around six this evening, German time, at a former US Air Force base high above the Moselle Valley, 60 miles from Frankfurt.

Yesterday, British Airways' chief executive, Rod Eddington, outlined the "future size and shape" of Europe's biggest airline. But Europe's largest no-frills airline, Ryanair, believes the future does not reside in the crowded hubs of Heathrow and Gatwick. Instead, the Irish carrier will point to the 156 passengers booked on this afternoon's flight from the sedentary south coast resort of Bournemouth to the strangely sized and shaped Hahn airport, in an obscure part of Rheinland-Pfalz. Ryanair believes it can make money on what, by any interpretation, is an unusual choice of route.

One reason the airline is so confident is that costs at the ex-military airfield are vanishingly small. Hahn is owned by the people who run Frankfurt-Main airport. But assistance from regional authorities, and the desire to develop Hahn as a hub, mean that fees charged to airlines – and indirectly to passengers – bear no relation to those at "real" Frankfurt.

If the low-cost formula works for this unlikely combination, then surely, argues Ryanair, it can work anywhere in Europe. And since the airline's market capitalisation is presently larger than that of British Airways, who is to describe no-frills flying between little-known airports as eccentric? Not Stelios Haji-Ioannou, whose 35th birthday is today. He will be celebrating at Luton, the once-forlorn airport where he started stirring up aviation in Europe. Six years ago, he started easyJet with a couple of planes borrowed from a British Airways affiliate. You could fly anywhere you wanted, so long as it was Glasgow.

Today sees the launch of the 41st and 42nd easyJet routes, from Gatwick to Palma and to Malaga, the latest strands in a web that is stretching across Europe. They are using slots at the Sussex airport that were vacated by British Airways after 11 September. But the easyJet chairman was hoping for a more generous birthday present from the British Airways boss, Rod Eddington.

Mr Eddington had pledged to chop unprofitable routes, which most people assumed would cut a swath through all the poor performers in Europe. Low-cost airlines like easyJet were poised to fill the vacuum as soon as British Airways announced it would stop flying to destinations like (so the speculation went) Nice, Lyon, Naples, Pisa and Newcastle.

The no-frills carriers were disappointed. British Airways is ending only five short-haul routes, and the same number of long-haul services. It refuses to say what they are, but long-distance travellers aiming for Bogota, Caracas, Lilongwe, Lusaka or Manila may well be advised to travel by the end of next month if they wish to fly with British Airways.

This looks more like snipping off a few untidy twigs than the root-and-branch honing that some in the City were demanding. But British Airways is fully aware that easyJet, Ryanair and Go are circling, vulture-like, ready to pick up slots and traffic forsaken by Britain's biggest airline.

One reason we're so interested in the fortunes of British Airways is because it is a national institution – that's part of its problem. As with BA, so with Air France, Lufthansa, Alitalia and so on. They are once-bright emblems of nationhood, considered essential last century but rapidly losing their sheen as the aircraft seat becomes a commodity of the masses, rather than an icon of glamour.

The people who are flying today from Bournemouth to Hahn, Bristol to Alicante, or Liverpool to Amsterdam are not intent on wining and dining. They simply want to arrive, alive at the right place at roughly the right time – and at a price that will not break their credit card limit or the company accountant's heart.

There is no shortage of airlines willing to deliver them, including daughters of mainstream airlines: BA's low-cost creation Go (since sold off) is slugging it out with bmi's offspring bmibaby, while KLM's Buzz tries to find a niche of its own in an increasingly complex business.

Air travel is a market, but it has historically been grotesquely distorted. Through the 20th century, airlines could control the supply of air travel – not least because they were often owned and operated by national governments, who would negotiate all kinds of restrictive treaties. These enabled the airlines to sustain a high-cost, high-fare environment where passenger needs were secondary.

Bilateral agreements that act in the interests of traditional airlines still constrain aviation in much of the world. But within Europe there's something approaching "freedom of the skies", whereby any European airline can fly anywhere it wishes. Naturally, terms and conditions apply – the main one being that newcomers to Heathrow will struggle to find slots.

While the fortunes of the flag-carriers, well, flag, the new breed thrive. Ryanair has long taken the view that people will cheerfully fly to places they have never heard of, so long as the price is right, and so far they have been proved correct. If Hahn doesn't appeal, then how about Friedrichafen, Klagenfurt or Eindhoven? Even if you can't spell it, you can go there for next to nothing. The same applies to almost anywhere within two hours' flying time of London.

The low-cost mantra is spreading. A month from today, East Midlands airport is to be transformed into a no-frills gateway when Go starts flying to Mediterranean destinations, Scotland's two largest cities, and Prague. Bmibaby, a new operator, arrives shortly afterwards.

British Airways retains an almost priceless asset – the largest number of slots at the world's most desirable international airport – that will sustain it through the present ghastly times.

Heathrow and Hahn, the two extremes of aviation infrastructure, can co-exist in exactly the same way that McDonald's and the Cafe Royale thrive in close proximity at Piccadilly Circus, despite offering radically different propositions. But right now the despondency at Heathrow is deeper than the gloom at Hahn.

Simon.Calder@independent.co.uk