BA puts breaks on OpenSkies to raise cash

British Airways has put its OpenSkies expansion plans on hold and is instead divesting aircraft in its mainline fleet that had previously been earmarked for its new offshoot airline.Chief Executive Willie Walsh said a letter of intent had been signed with another carrier to sell for cash up to 11 of its current fleet of 15 Boeing 757-200s. This would leaving only the four 757s, which are already operated by OpenSkies.

BA’s OpenSkies subsidary began flying between Paris Orly and New York JFK in June, followed by a second route between Amsterdam and JFK in October.

But in the wake of the financial crisis, OpenSkies has experienced a slump in demand for air travel, in particular weak sales to premium passengers. It has performed below budget, with volumes and average fare levels failing to meet targets.

BA group operating profits have fallen from last year’s record level to only slightly more than breakeven in the current financial year to the end of March, forcing it to restructure.

It had already postponed the transfer of a fifth aircraft to OpenSkies last October. It has chosen to make preserving cash a priority in the current crisis.

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BA had been mulling the launch of OpenSkies services between several other destinations and New York including Barcelona, Brussels, Frankfurt and Milan.
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