http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article2283019.ece
BA taunts rivals with US flights from European capitals
Dominic O'Connell
BRITISH AIRWAYS is to launch its first transatlantic flights from
continental capitals next summer in a move that is expected to start a
tit-for-tat battle with its large European rivals.
The company's directors are understood to have given the go-ahead for
the services within the past few weeks. A new "airline-within-an-
airline" will use a fleet of modified Boeing 757s, smaller than the
planes BA uses for its transatlantic flights from the UK.
They are expected to fly from Brussels, Madrid and Paris to New York's
John F Kennedy airport, although the final network is yet to be
decided. It is thought the services will start in May.
The flights will not be business-class only, as some had thought.
Instead, they will have at least two classes, business and a less
luxurious offering. It is not yet known whether this will be BA's
normal economy seating or a type of premium-economy cabin.
BA declined to comment on its plans, but Willie Walsh, the chief
executive, has in the past made clear its intentions to start services
from the Continent to America.
The airline has been prevented from operating from other European
countries by restrictive treaties governing air services. But last
year Europe and America signed an "open skies" deal, removing most of
the restrictions on where airlines from the two trading blocs could
fly. The restrictions will be lifted from April next year.
BA executives believe that the strength of its brand is such that it
can lure passengers away from its big European rivals such as Air
France and Lufthansa, even in their home markets. They also think the
same is true in America, where the BA name has particular clout with
business travellers.
But Air France and Lufthansa are unlikely to take BA's invasion of
their home turf lying down. European airlines could choose to follow
BA's lead and start flights direct from Heathrow to the US, or, as
some analysts believe more likely, donate precious landing slots at
the London airport to their American partner airlines to allow them to
compete head-on with BA.
Air France and KLM are in a marketing alliance with America's
Northwest and Delta, which are likely to have garnered sufficient
slots from their European partners to start services from Heathrow
from next March.
BA also faces competition from a new wave of low-cost all-business-
class airlines. Eos and MaxJet fly from Stansted to New York and other
US destinations, while Silver-Jet flies from Luton to New York.
Some airline executives believe that a major European airline could
strike a franchise deal with one of the new carriers to mount a
frontal assault on BA at Heathrow.
Meanwhile, the US Department of Justice is this week expected to press
ahead with its investigation into alleged price-fixing by airlines,
including BA, and to announce details of any charges arising from its
probe.
BA is expected to plead guilty at a court hearing in Washington,
having already accepted a fine. It is not clear whether there will be
criminal charges against individuals, although the department is
expected to name some former and current BA employees who are under
investigation.
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