BA cuts fares to compete with low-cost rivals

British Airways fired the first shots yesterday in its price war with budget airlines by announcing big fare reductions on its domestic network.

The price cuts will reduce return fares on some routes by up to 70 per cent and are designed to halt the inroads being made into important BA markets such as London to Scotland. Starting this weekend, return fares from Heathrow and Gatwick to Edinburgh, Manchester, Newcastle and Glasgow will be cut to as little as £69, while the price of a round trip to Aberdeen will fall to £79.

The cheapest return fare from Gatwick to Edinburgh this weekend on easyJet's website is £155.

As part of the new approach BA will also scrap fare restrictions requiring passengers to book in advance and stay a Saturday night to qualify for the cheapest tickets.

In common with the marketing techniques employed by low-cost carriers, BA's prices will be lower the earlier a booking is made. Passengers will also get a £5 discount if they book online, although they will still be able to buy tickets through conventional outlets, such as travel agents and at BA shops.

BA also said it was introducing flexible fares to woo back business passengers lost to low-cost operators such as Go and easyJet. A business traveller will be able to book a flight from London to Edinburgh with a flexible return, saving £110 on the standard £309 business-class fare.

Tiffany Hall, BA's head of sales and marketing for the UK and Ireland, said: "We want to compete profitably and intelligently alongside the no-frills carriers by adopting what they do well – online bookings and pricing simplicity."

BA's low-cost rivals dismissed the initiative as a "gimmick" adding that they were "spectacularly unimpressed".

A spokesman for easyJet said: "In order to offer low fares on a sustainable basis you need a genuinely low cost base and we haven't heard anything from BA which suggests they are serious about cutting their costs permanently."

He added that easyJet had no plans to respond to BA's price reductions with a special fare promotion of its own.

The price cuts on BA's domestic routes will be followed by similar fare reductions on selected European destinations in the summer. But a BA spokeswoman said the airline had not yet decided which routes to select or the size of the reductions.