Branson demands 'don't bail out BA'

Jun 22 2009 by Andrew Mernin, The Journal

BELEAGUERED airline British Airways is considering selling its OpenSkies subsidiary only a year after it acquired it, it was reported yesterday.

The airline, which last week asked its staff to consider working for free some weeks, is believed to be considering winding up or selling the business, which runs flights from Paris and Amsterdam to the United States.

BA bought the business in 2008, when it paid £54m for French airline L’Avion, as part of plans to offer direct flights between France and the US.

The acquisition followed the Open Skies treaty, which enabled EU airlines to fly to the US from any European country, not just their home country.

The new airline was named after the treaty that had made it possible and was launched last summer.

But the business is currently running at a loss, and under its original business plan is not expected to make a profit until the third year of its operation.

The number of business passengers flying on trans-Atlantic routes has also been hit hard by the economic downturn.

Meanwhile, Sir Richard Branson has urged the Government to resist any attempts to bail out BA and has described the company as practically worthless.

The Virgin Atlantic founder’s comments come ahead of vital talks this week between BA management and cabin and ground crew over pay-cuts and lay-offs aimed at saving £100m a year.

BA’s chief executive Willie Walsh, who has warned that the carrier is facing a fight for survival, is said to be looking for a rescue deal before the end of this month.

Branson reportedly said “it would not be in Britain’s interest,” for ministers to step in to secure the firm’s future.

He said: “We and others are standing by ready to take on their routes and runway slots at Heathrow if they get into serious trouble.

“I thought the US government’s bail-out of the car companies was a bad idea and it’s the same for BA.”

Virgin had considered making a bid for BA, but ultimately opted against it after deciding the company’s liabilities were too great.

A BA spokesman over the weekend said: “This is fantasy. There are no talks with government, and there will be no talks. We have opposed state aid and our position has not changed.”

I thought the US government’s bail-out of the car companies was a bad idea and it’s the same for BA