British Airways has been forced to ditch its OpenSkies New York to Amsterdam service due to recession causing the bottom to drop out of the premium market.

The JFK to Amsterdam Schiphol service is being axed on 16 August, because “the economic environment has produced a significant drop in Market demand,” according to OpenSkies CEO Dale Moss.

OpenSkies, which offers two classes of upscale service, says it is “refocusing” efforts on its New York – Paris Orly service. In a statement the premium-only airline claims that despite market conditions it has doubled its share of the Paris – New York business class route to 25% over the last year.

Openskies - named after the 2008 treaty that allows EU operators to fly to the US from any European country, not just their country of origin - was launched last summer by chief executive Willie Walsh. He set out a series of ambitions plans that including buying French airline L’Avion last year for £54m.

Walsh was so keen to establish the OpenSkies business that he risked a strike by one of the company’s most powerful unions, the British Airline Pilots’ Association (Balpa), which objected to the new pilots being hired on less attractive terms than colleagues at BA’s main operation. The wrangle went to the high court, but Balpa withdrew because of the high costs linked to a prolonged legal dispute.

Last month it emerged that British Airways was also mulling a disposal of its OpenSkies as part of its measure to desperately curb growing losses.
City sources reported that BA could either wind up or sell its off-shoot, in a move that highlights the sharp decline in business passengers flying Transatlantic.

The International Air Transport Association’s most recent Premium Traffic Monitor says the number of passengers flying on first and business class tickets plummeted 23.6% in May 2009, compared to a year earlier. Worldwide, IATA predicts airlines are on a precarious course to lose $9 billion this year.

Remaining in the running between JFK and Amsterdam are KLM and Delta Air Lines. Continental Airlines flies nearby Newark - Amsterdam nonstop. OpenSkies says flyers who are currently ticketed between Kennedy and Amsterdam Schiphol can either get a refund, or travel on British Airways via London Heathrow (LHR).