British Airways has suspended its plans to create a new budget airline based in London Gatwick, blaming pilots for being unwilling to sign on to the deal.
The Future Of British Airways At London Gatwick Is In Doubt After Pilots Reject New Low-Cost Airline
Less than a month ago, British Airways revealed its plan to create a new low-cost airline to operate out of London Gatwick (LGW). Even before the pandemic, British Airways struggled with profitability out of its Gatwick base and the new carrier was intended to compete with budget carriers like EasyJet and Ryanair.
Interestingly, British Airways created a budget carrier called Go Fly in 1998 that was based out of Gatwick Airport. In 2002, British Airways sold it to EasyJet, which is now the largest carrier operating out of LGW and a thorn in the side of BA.
But pilots, represented by the British Airline Pilots Association (BALPA), were unable to reach a deal with BA over pay rates and other labor issues.
A British Airways spokesperson noted:
“We’re disappointed that our plans for a new short-haul subsidiary at Gatwick have not received BALPA’s support. After many years of losing money on European flights from the airport, we were clear that coming out of the pandemic, we needed a plan to make Gatwick profitable and competitive.
“With regret, we will now suspend our short-haul operations at Gatwick, with the exception of a small number of domestic services connecting to our long-haul operation, and will pursue alternative uses for the London Gatwick short-haul slots.”
Meanwhile, BALPA did not fully close the door on future negotiations:
“We are disappointed that we couldn’t come to arrangements that were acceptable to our members. We stand ready to work with BA to find such arrangements that could be acceptable.”
But the outright rejection of the plan suggests the two sides were far too apart.
How Will British Airways Use Its Gatwick Slots Now?
In the meantime, British Airways will pursue alternate uses for its Gatwick slots. This year, that means using them for domestic flights and leaving many unused or underutilized while a pandemic-era waiver remains in effect. BA’s Chief Operating Officer, Jason Mahoney, explained:
“We believed we could build a competitive BA-branded short-haul operation out of Gatwick. But to make this happen, we would have to turn a loss-making operation into a profitable one.
“We will now pursue alternative uses for the London Gatwick short-haul slots. I say this with sadness because a competitive Gatwick short-haul operation next summer would have been good for our business as we try to recover and pay back the debts that the pandemic has necessitated.”
Longterm, British Airways CEO Sean Doyle expressed a willingness to sell the slots, which could go to an ultra-low-cost carrier like Wizz Air.
Some would argue that British Airways is already a low-cost carrier on shorthaul flights, but the point of new subsidiary was not to further trim the in-flight product, but to trim labor costs in an effort to make Gatwick more competitive.
While pilots stood their ground, if British Airways ends up selling many of its Gatwick slots, I’m not sure they come out ahead.