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Monday, January 30, 2023

British Airways Moves a Step Closer to Launch New Budget Carrier

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British Airways has moved a step closer to creating a low-cost airline to run short-haul routes from London Gatwick Airport after talks with the Unite union, the largest labor organization representing more than 10,000 cabin crew and ground personnel.

Sean Doyle, British Airways’ chief executive, stated that the new airline’s strategy is “progressing well” and that “it appears that we will be up and running to fly the summer schedule.”

The airline and the pilots had already negotiated an agreement. The new airline is expected to have a fleet of 17 A320s and employ 160 pilots and hundreds of cabin personnel.

Last year, the airline let off almost 400 pilots and placed another 300 fleet-less pilots on non-operational pay, as well as thousands of cabin workers, in an effort to save costs associated with the aviation industry’s shutdown.

According to Unite, the new airline might create jobs at the airport, as well as benefit the tourism industry.

In August, British Airways disclosed plans for a new cheap airline to run European routes from Gatwick, allowing the airport to become “profitable and competitive” after years of losing money on European flights.

As a result of the prolonged pandemic, Gatwick has dropped to second place in the country. During the pandemic, London’s Stansted Airport surpassed Gatwick as the country’s second busiest airport, thanks largely to Ryanair’s operation of hundreds of discounted flights per week to boost passenger numbers.

Gatwick, on the other hand, is considering increasing its facilities by constructing a second runway; a consultation is now underway.

Meanwhile, British Airways’ parent company, IAG, reported a £2.1 billion ($2.83 billion) loss in the first nine months of 2021, and predicts a £2.57 billion ($3.47 billion) loss this year. IAG also announced that its initial public offering (IPO) had raised £10.6 billion ($14.3 billion).

IAG’s CEO, Luis Gallego, was upbeat about the future. He’s noted that long-haul flights, which are the main source of money, are recovering faster than short-haul flights.

Also, according to Gallego, business travelers are returning to the skies, with bookings between corporate hubs in the United Kingdom and Europe and the United States’ east coast surging.

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