No-frills competition forces BA re-think

Flying short-haul in Business Class with flag carrier British Airways could soon become a thing of the past, according to chief executive Willie Walsh.

The British Airways boss said the market for Business Class seats shrank dramatically during the recession, with premium passengers increasingly relying on no-frills airlines for short-haul travel.

“Short-haul premium will never recover,” Mr Walsh told journalists. “That part of the business has changed forever and we have to address it.”

Revisions to BA’s premium services are unlikely to impact on Heathrow Airport, which still enjoys strong demand due to Business Class transfer traffic.

But services at Gatwick Airport and regional gateways will be affected, with the flag carrier now planning to strip premium seats from planes operating out of those bases.

“British Airways is fast realising that its reliance on premium fares to drive revenue will not work, particularly when consumer spending habits have so drastically changed in the wake of the financial crises,” Saj Ahmad, analyst at FBE Aerospace, explained to Cheapflights.

“On short-haul flights, the margins become even harder to attain, because low-cost airlines can offer frills-free service at a fraction of the cost British Airways charges.”

Mr Ahmad said the disappearance of short-haul Business Class seats underscores wider restructuring efforts within BA, which has been accused of adopting no-frills tactics.

But the development also comes as the flag carrier puts the finishing touches on its new long-haul First Class cabins, suggesting that BA wants to ramp up competition with luxury Asian and Middle Eastern carriers while also combating easyJet and Ryanair closer to home.

© Cheapflights Ltd

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