News

BA Openskies drops AMS-JFK route

27 Jul 2009 by Mark Caswell

Openskies, BA’s all business class subsidiary, is to suspend flights from Amsterdam to New York from August 16, a service which began last October.

The airline said it would now “re-focus” on its remaining route, Paris-New York.

Dale Moss, Openskies’ managing director, said: “The economic environment has produced a significant drop in market demand.

“While OpenSkies developed more than 16 per cent market share during only nine months, it was not enough to sustain a profitable service at this time.

“Moreover with remaining uncertainty over the near term, suspending the service clearly was the most prudent decision to preserve our resources.”

The airline said that customers who currently hold tickets for the Amsterdam–New York route will receive the choice of either the opportunity to travel on British Airways via London or a refund. It added that the carrier’s concierge team will contact clients who have booked via the website or call centre to discuss their options.

Openskies started operations in June 8, 2008 with the Paris-New York service. A month later it bought L’Avion, a French all business class airline operating the same route.

BA declined to deny a report last week that it was planning to sell Openskies. Reuters said that Reynolds Partners, a London-based independent investment bank, had been asked to find a buyer for the airline.

The report came a week after Mr Moss, said the carrier had missed its first year financial targets. Speaking at the Business Travel Market in London in June, Moss said it would “persevere” despite a drop on around 45 per cent in business traffic on its two routes, Paris and Amsterdam to New York.

Reuters reported that BA wanted to sell a majority stake in Openskies, preferably in the next two or three months.

BA said in a statement it said: “We are reviewing all aspects of our business in the current economic environment. OpenSkies is a small part of our business and its losses are not significant compared to losses in other parts of the company.”

The carrier is going ahead with plans to launch an all-business class service form London City Airport to New York on September 29.

BA also announced on July 17 that it had completed the terms of its plan to raise £350m through a convertible bonds issue.

The airline, which is aiming to raise about £600m cash, said it had also agreed terms with the trustees of its pension scheme to raise up to £330m through releasing some bank guarantees.

BA’s Willie Walsh has said the carrier is in a battle for survival.

For more information visit flyopenskies.com, ba.com.

Report by Stanley Slaughter

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