OpenSkies halts expansion plans

3 Nov 2008 by Mark Caswell

British Airways’ OpenSkies subsidiary, established to
operate flights between mainland Europe and the US, has halted its expansion plans.

In a leaked staff memo BA warned, “Revenues are below target
through a combination of lower volume and yields and as a priority we must take
action to ensure we keep within our cash reserves.”  

OpenSkies currently has a fleet of four narrow-bodied B757s.
A fifth B757 was due to join the fleet next March but this plan has now been
scrapped. The airline says that no further routes will be considered
until the economic situation improves.

The first OpenSkies route, linking Paris Orly with New York
JFK, was inaugurated last June. A further route, between Amsterdam and New York JFK, started last
month with once a day (except Saturday) frequency in competition with the four
daily flights offered (into JFK) by KLM, Delta and Northwest.

OpenSkies seems to have found this particular route a
challenge. Even with keen pricing (plus voucher discounts offered in
BA’s Schiphol lounge) loads aren’t up to scratch.

According to the OpenSkies website a small number of flights
have been cancelled in the weeks ahead with means that there is no flight at
all on some days.

The problem with Amsterdam
is that, as other foreign carriers have discovered, the end-to-end market is
limited in scope and home carrier KLM plus partners control most of the

Several years ago the Amsterdam-JFK route was plied by Singapore Airlines (SIA).
Even though SIA priced keenly and used the latest B747-400s it failed against the might of
KLM. If award-winning SIA couldn’t succeed on this route then
what hope has OpenSkies ?

For more information visit

Report by Alex McWhirter

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