Go, the low-cost airline set up by British Airways last year, looks set to adopt the strategy of rival airlines such as easyJet and Virgin Express by establishing a string of "offshore" mini-hubs throughout Europe.
Barbara Cassani, chief executive of the London Stansted-based airline, revealed the plans while addressing the UK Royal Aeronautical Society in London this month. She predicts Europe's low-cost airlines will "triple or quadruple" in size over the next 10 years, by which time she would expect Go to have "several bases of operations around Europe all making a tidy return for my shareholder".
Cassani says Go, like its low-fare rivals, will continue to seek "attractive opportunities" at secondary - or "tertiary" - airports that are not restricted by slot co-ordination, to ensure aircraft productivity is not compromised.
Go's fleet includes 10 leased Boeing 737-300s, and the airline plans to increase this to 13 aircraft by the end of the year. Cassani says the next phase of expansion is being studied. The likely strategy is to add more 737-300s and increase frequencies rather than moving to the larger 737-400.
Cassani says the airline is examining the many cost and operational issues at potential secondary bases throughout Europe before making its selections.
She plays down Go's links with parent BA and denies there are any "Machiavellian" motives behind the airline being set up. "We are aimed at the 'new business' sector of the market," she says.
Cassani confirms, however, that BA is undertaking an in-depth review of its own short-haul strategy. She does not deny that Go could benefit from any changes in BA's operations. BA is restructuring its business into short and long-haul divisions (Flight International, 3-9 March) and the carrier is understood to be initiating a programme to examine every short-haul route, with the aim of cutting back or dropping loss-making operations and expanding lucrative areas of business.
In the 12 months ending 31 March, 1998, BA's European operations lost £127 million ($204 million) compared to a £6 million profit in the previous 12 months. The airline is reported to have given its short-haul business two years to move into the black.
Source: Flight International
