Chris Jasper/LONDON
British Airways chief executive Rod Eddington has raised a series of 'crisis' issues facing the carrier with UK prime minister Tony Blair, Flight International can reveal. The pair met shortly before BA unveiled changes to its network strategy, including route cuts, which will see overall capacity reduced by 10% by its next summer timetable.
Eddington is desperate to return BA to profitability after its dismal performance in the year to March, and is thought to have appealed to Blair to help in certain key areas.
A BA source says the discussion was "wide ranging", covering issues such as Concorde's grounding, but centred on topics including the position of the UK Office of Fair Trading regarding any alliance between BA and a US carrier - and the need for a level playing field with competitors, especially Star Alliance carriers - as well as delays in approving the construction of a fifth terminal at London Heathrow airport.
Eddington is also likely to have raised plans for reforming BA's hub strategy, a move which is expected to see London Gatwick effectively downgraded, resulting in thousands of job losses.
BA's latest network rethink, entailing more longhaul changes, will be introduced with its summer 2001 schedule. Changes include:
• Services to Kuala Lumpur will be scrapped because of "the poor commercial performance of the route".
• In line with plans to consolidate particular services at either Heathrow or Gatwick, two longhaul routes - Miami and Sao Paulo (via Rio Janeiro) - become Heathrow-only services.
• BA will resume flights to Melbourne after a two-year break (during which time it has codeshared with Qantas).
• BA is pressing ahead with introduction of Boeing 777 aircraft on former 747 routes, cutting capacity but offering more frequencies with the aim of boosting yields. Sao Paulo and Buenos Aires become 777 routes, while the Phoenix/San Diego 747 route will be 'delinked', each getting a daily 777 service.
BA has already announced changes to its coming winter programme which generally cut shorthaul routes and frequencies, in addition to which it will scrap Heathrow-Paris Orly services completely next summer, increasing Charles de Gaulle frequencies.
Across its network, year-on-year capacity will drop 10% in available seat kilometres - 2% more than earlier planned - with Heathrow ASKs down 9% and Gatwick's down 15%. BA is still "reviewing its loss-making Gatwick operations", with a new strategy expected soon.
• US-UK air services talks, set for 18-20 October, have been "deferred" until "the current uncertainty surrounding BA's alliance strategy is resolved".
A source says that following the collapse of its KLM merger plan, BA has not decided whether to re-apply for exemption with oneworld partner American Airlines. A "balanced interim deal" may still be possible, says the UK.
Source: Flight International
