BA Revamps U.K.-Europe Fares

British Airways has scrapped Saturday night stay and advance purchase restrictions on 42 routes from the UK to continental Europe. It will usher in the same pricing revolution for the rest of its short-haul network during the summer. This follows similar changes announced on BA's 29 domestic routes from London in April. These changes also will apply to 11 cross-country domestic routes within the United Kingdom.

The airline openly acknowledges that it is responding to the threat of low-cost carriers, which compete with BA on 62 percent of its short-haul network. BMI British Midland, the second-largest U.K. player on short-haul routes, also has ditched its traditional full-fare system and emulated low-cost airlines by moving to a similar one-way fare structure. Elsewhere in Europe, SAS has introduced some modest price reforms on intra-Scandinavian services and Lufthansa said it is considering a move to one-way fares on short-haul flights.

Examples of BMI's new one-way prices include London Heathrow to Brussels from $67 and to Dublin from $68. BA said it will offer roundtrip fares from Heathrow to Milan starting at $175-the previous price was $725. The cheapest tickets will be available on a first-come, first-serve basis, with prices tiered upward as more seats on the flight are sold. However, not all flights will have ultra-cheap seats: The best bargains will be found at off-peak times, such as early afternoon. There will be several conditions attached to the cheapest tickets, the most important of which are that they are not refundable or interlineable. Conditions become more flexible as the fare rises. BMI will allow changes on its discounted tickets for $37 per sector.

Tiffany Hall, BA's general manager for sales in the U.K. and Ireland, said the airline would continue to negotiate deals with corporate clients who want to buy fully flexible fares but she expects most buyers to adopt a mixture of full-fare and discounted tickets. "This does start to change the way we work with corporates," she said. "We are seeing many of them begin to make the trade-off and taking more off-peak flights in return for cheaper fares. It is also possible to mix and match so business travelers can buy a cheap fare for the outbound flight if they know what time their meeting begins and combine it with a flexible fare for the return if they are not sure what time it will end."

BA is not intending to make any changes to its customer service, which includes meals on board and the awarding of frequent-flier mileage.

The first batch of international routes on which BA's new price structure takes effect, starting Thursday, is to France, Italy, the Netherlands, Scandinavia and Portugal. So far, neither BA nor BMI has introduced the new fare types on routes to countries where it has an airline alliance partner: Spain and Finland in the case of BA and Germany in the case of BMI.