BA Subsidiary Nixes Plans For Fifth Plane

The response to a scenario British Airways never wanted in the first place, upstart business-class subsidiary OpenSkies is reportedly operating far below expectations... and given current economic conditions, its days could be numbered.

The London Telegraph reports the airline -- which started operations in June -- has failed to attract large numbers of travelers on its routes from New York City to Paris Orly and Amsterdam.

"At OpenSkies, revenues are below target through a combination of lower volumes and yields, and as a priority we must take actions to ensure we keep within our cash reserves," reads an internal British Airways memo, obtained by the newspaper.

Those actions include deferring the delivery of a fifth Boeing 757 -- reconfigured for all-business-class seating -- originally slated for March 2009. The airline launched with a single 757 taken from the British Airways mainline fleet, and added a second soon thereafter.

Two more planes were brought online following BA's purchase of French biz-class carrier L'Avion. One of those planes was recently pressed into service for OpenSkies' new service to Amsterdam, as ANN reported.

British Airways first announced OpenSkies in January, in response to the 2007 "open-skies" agreement between authorities in the United States, and the European Union. It was a clear case of "if you can't beat 'em, join 'em"... as British Airways chairman Willie Walsh unsuccessfully argued prior to the bill's passage that Open Skies legislation would be "a poor agreement for Britain and Europe."

Walsh openly opposed EU passage of the Open Skies treaty, as the legislation reduced the monopoly his airline enjoyed at London Heathrow. OpenSkies -- the airline -- represented the first time British Airways planes operated direct long-haul flights between the US and continental Europe.

A spokesman for British Airways declined to comment on operating figures for OpenSkies, saying those numbers were "commercially confidential." He did admit, however, that "like all airlines, OpenSkies is facing challenging trading conditions."

It's worth noting that 2008 has seen the downfall of a number of business-class trans-Atlantic airlines, with operating models similar to OpenSkies. Those now-defunct airlines include Silverjet, and MAXJet.

FMI: www.flyopenskies.com