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British Airways May Scrap OpenSkies

June 22, 2009 By: Jena Tesse Fox


Breaking Travel News is reporting that British Airways is mulling a disposal of its OpenSkies subsidiary as it desperately grapples to curb growing losses.

City sources say BA could either wind up or sell its off-shoot, which currently operates flights from Paris and Amsterdam to the U.S., in a move that highlights the sharp decline in business passengers flying transatlantic.

OpenSkies—named after the 2008 treaty that allows EU operators to fly to the US from any European country, not just their country of origin—was launched last summer by chief executive Willie Walsh. He set out on a series of ambitious initiatives that included buying French airline L’Avion last year for $88.5 million.

Walsh was so keen to establish the OpenSkies business that he risked a strike by one of the company's most powerful unions, the British Airline Pilots' Association (Balpa), which objected to the new pilots being hired on less attractive terms than colleagues at BA's main operation. The wrangle went to the high court, but Balpa withdrew because of the high costs linked to a prolonged legal dispute.

Abandoning OpenSkies would be a blow to BA's credibility more than to its financial status, as the subsidiary is a relatively small part of the group with only four aircraft.

Other airlines, including Air France, have launched transatlantic routes since the treaty came into effect, but all are suffering losses in the current climate.

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