British Airways To Launch U.S.-European Carrier

British Airways plans to launch an airline serving the United States from continental Europe in June. In a nod to the historic agreement that makes an operation outside its home country possible, the new carrier is to be called OpenSkies. It will be run by industry stalwart and U.S. citizen Dale Moss, who left BA in 2006 after 30 years with the airline.

BA said the first route to be flown by OpenSkies will be from New York's John F. Kennedy International Airport to either Paris or Brussels. It will introduce a second aircraft by year-end to serve whichever of those two destinations is not chosen for the inaugural route. OpenSkies will fly a fleet of elderly Boeing 757s, all of them transferred from the main BA fleet. The carrier intends to operate six 757s by the end of 2009.

Contrary to earlier indications from BA, OpenSkies will not be a business-class-only carrier. It will fly three classes: business, with 24 lie-flat seats, premium economy, with 28 seats with a pitch of 52 inches, and economy, with 30 seats.

BA's move into the U.S.-continental Europe market is in part a response to the much more significant expansion of transatlantic competition at its home airport, London Heathrow, following the signing of the U.S.-European Union Open Skies deal last April. The agreement takes effect on March 30 and eight airlines already have announced 18 new services from the world's busiest international airports. These include Continental Airlines, Delta Air Lines, Northwest Airlines and US Airways, which all will enter Heathrow for the first time.

Another airline threatened by the impact of Open Skies on Heathrow is Virgin Atlantic. It too announced it would respond by launching a business-class carrier between continental Europe and the United States. However, late last year, Virgin said it was shelving the plans, attributing the change of heart to a belief that Open Skies may collapse in 2010. This is the date by which the agreement calls for a second phase that would require broader EU carrier access to the U.S. domestic market and reduced restrictions on foreign ownership of U.S. carriers.

An analyst told BTN that the new OpenSkies airline is less about Open Skies and more a Trojan horse to establish a lower cost structure for BA. "Fares are much cheaper from continental Europe to the U.S. than they are from the U.K.," he said. "The only way it can work for BA is to establish a lower cost structure."

After leaving BA, where he served as director of global sales and marketing, Dale Moss briefly was chief operating officer for Indian airline Jet Airways and also spent time on the public speaking circuit.