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British Airways bets on a boutique airline offshoot

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Jan 21, 2008

British Airways announced plans last week to join the new boutique premium-class airline game across the Atlantic. But it is not bringing a lot of money to the table.

In an interview, Dale Moss, a 30-year British air veteran who is managing director of the new subsidiary, OpenSkies, discussed the strategy behind a bid for the high-end market at a time when the American economy seems to be in for some turbulence.

First, the basics: OpenSkies will start small, with a single Boeing 757 from British Airways' fleet.

Starting in June, OpenSkies will fly the 757, with another to be added late this year and four more by the end of 2009, when new routes are planned, configured with 82 seats.

Business class will have 24 flat-bed seats; behind that will be 28 "premium economy" seats with 52 inches of legroom; and -- in a move that some competitors say they find confounding -- there will be 30 coach seats in five rows.

The initial route has not been set yet, partly because of uncertainty about whether Newark will have to be the fallback if a landing slot cannot be freed at Kennedy International Airport.

British Airways also has not yet announced whether the European city will be Paris or Brussels, but it will be one of the two, and the other will be added later.

The bet, which would have good odds in a growing economy, is that business travel between Europe and the United States is growing and that premium or mostly premium niche carriers can take a chunk of that market with lower fares and attractive products.

MaxJet, one of two carriers that started up on the high-competition New York-to-London route two years ago, went out of business Dec. 24, after what competitors said was an overexpansion of its routes.

The other startups flying between New York/Newark and London - Eos and Silverjet -- say they are in good shape and are developing loyal corporate travel bases. So does l'Avion, a start-up airline that began flying between Paris and Newark early last year.

One marketing key, said Moss, is attracting business from the rapidly growing ranks of smaller companies and the self-employed in both Europe and the United States.

"We're really gearing ourselves for the medium-size corporations, smaller companies and entrepreneurs," Moss said.

"I really believe that's our customer base, those companies and entrepreneurs who can't get the really great deals" that big-volume corporations can negotiate with the major airlines.

heraldtribune.com

British Airways bets on a boutique airline offshoot
AP



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