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Home  >  British Airways  >  British Airways Scraps Plans For A Low-Cost Airline
British Airways

British Airways Scraps Plans For A Low-Cost Airline

Matthew Klint Posted onSeptember 24, 2021September 23, 2021 5 Comments

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.

In This Post:
  • The Future Of British Airways At London Gatwick Is In Doubt After Pilots Reject New Low-Cost Airline
  • How Will British Airways Use Its Gatwick Slots Now?
  • CONCLUSION

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.

CONCLUSION

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.

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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5 Comments

  1. ChuckMO Reply
    September 24, 2021 at 6:43 am

    Go Fly was based at STN, not LGW.

  2. Mitch Cumstein Reply
    September 24, 2021 at 7:17 am

    Why would an ULCC like BA want to launch a LCC? Would the LCC offer proper business class?

    • emercycrite Reply
      September 25, 2021 at 7:11 am

      LOL

  3. stogieguy7 Reply
    September 24, 2021 at 10:24 am

    It just as well, as these sorts of schemes rarely seem to work out. And why would they? You have a “low cost’ airline run by a high cost corporation. Sure, they can try to run the “budget” airline on the cheap – but what ends up happening is that the homegrown ULCC’s tend to be better at this and thus more successful. The only cases I see of this strategy working is the likes of AC and AC Rouge – but AC Rouge is still booked via AC, but operates more competitive leisure routes and it not in competition with the rest of AC but operated in sync with it.

    BA’s proposal with a LH Group-esque stupid idea.

  4. Andrew-Stuart Reply
    September 25, 2021 at 12:46 pm

    This whole article could be rounded up by using just the headline and the last sentence of the article. That pretty much…says it all!

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