British Airways has confirmed that it is in talks with its trade unions to introduce a low-cost subsidiary at Gatwick Airport.

Last Friday (27 August) The Times published a statement from the airline confirming the discussions but also saying that no further comment would be made at this time.

Following its takeover of British Caledonian, BA became the largest operator at Gatwick but in more recent times has been overtaken by easyJet, and the withdrawn Norwegian. It is now in the (currently closed) Main Terminal having swapped with easyJet from the North Terminal.  Wizz has made it clear that it seeks more slots and an expansion at Gatwick.

BA’s history with low-cost is poor. Go, a subsidiary, was at Stansted, and was integrated into easyJet.  The more recent reduction of Economy Class cabin services on the European network was deemed a failure.  By creating a new airline it might be able to secure lower staff costs more in line with the budget carriers.  The Virgin Atlantic low-cost operation Little Red (at Heathrow) was not a success.

The BA label carries weight, seen by the success of CityFlyer at London City Airport. A new label would be expensive in marketing terms and a real risk.

Regular contributor to Business Travel News, Chris Tarry, raised the same question.  “It shows that BA is committed to Gatwick – but the question of this plan is implementation. How will it be able to build an operation that is truly low-cost and competitive?”

With owner IAG in a financial crisis BA itself reported an operating loss for the first six months of the year at €1.3bn, compared with the much smaller Iberia at €330m and Aer Lingus €192m.  Vueling, which had no cargo business to fall back on, lost €875m on revenues down 77%.

www.ba.com

www.gatwickairport.com