British Airways Subsidiary Takes Off

"OpenSkies" is a reality. Not just the joint international trans-Atlantic airline agreement between the United States and the European Union, but also the airline (somewhat grudgingly) created by British Airways to take advantage of that very deal.

Bloomberg reports the first OpenSkies Boeing 757 flight took off from Paris-Orly at 10:49 am in Paris, and arrived at New York's JFK International just before 1:30 local time.

The timing of the launch of an all-business-class airline strikes some as strange... given that a number of similar airlines, including MAXJet Eos Airlines and SilverJet, have folded their wings over the past few months in the wake of surging fuel prices. But British Airways CEO Willie Walsh says its subsidiary will be able to operate more cheaply than independently-branded carriers were able to manage.

"While the economic climate has worsened in recent months, we believe that OpenSkies can compete effectively," Walsh said earlier this week. "It has a low cost base and support from British Airways in key areas such as sales and marketing. This differentiates it from some new airlines that have failed recently which were operating in isolation."

As ANN has reported, British Airways was opposed to any kind of Open Skies agreement between the US and EU, as such a deal promised to reduce the airline's control over London's Heathrow Airport -- seen by many as the gateway between the United States and Europe. The deal passed anyway... and earlier this year, BA announced the creation of OpenSkies to attract well-monied business-class fliers away from newly-unrestricted US airlines.

British Airways is taking a decidedly cautious approach with its newest subsidiary. Using a single 757 pulled from BA's mainline fleet, OpenSkies will initially operate only between Orly and JFK. More planes, and routes, will be added as the concept proves itself.

If all goes well, OpenSkies will have six planes in its fleet by the end of 2009. Possible future routes include New York to Amsterdam, Brussels, Frankfurt, and Milan.

"The timing's unfortunate but BA probably have one of the better brands in the US," said Davy Stockbrokers analyst Stephen Furlong. "But ultimately they'll still have to generate a return."

To set OpenSkies apart from other airlines, the 757s are outfitted with 24 business-class berths, another 28 premium economy seats, and 30 in economy. Even passengers in the "cheap" seats benefit from added room befitting any aircraft, normally configured to carry over 200 passengers with fewer than 100 onboard.

"OpenSkies is a defensive move by British Airways," said Furlong. "It seems to be a case of 'you came into my market, so I'll come into yours.'"

FMI: www.flyopenskies.com