BA Unveils Own Regional Airline as Low-Cost Carrier

British Airways is re-launching its UK regional airline, CitiExpress, as a budget carrier in an effort to improve profitability and regain ground lost to low-cost competitors. BA is reducing many fares by up to 40 percent as it seeks to regain ground lost to no-frills carriers in recent years.

According to reports, Willie Walsh, the new British Airways chief executive, has told its loss-making subsidiary, CitiExpress, it must make a profit within two years or close. The tough timetable for a company expected to run up an operating deficit of £20 million in 2005 and 2006 was revealed as it outlined plans for a re-launch under a new banner, BA Connect.

The new carrier will offer year-round, one-way prices that match the no-frills airlines with added service, according to BA Connect managing director David Evans. “The move is a direct response to changing customer needs and the challenges that have emerged in the marketplace.”

Like budget airlines, BA Connect will have single-class cabins and “buy-on-board” hot and cold catering. The airline will offer one-way fares for £25 from destinations including Bristol, Manchester, Edinburgh and Birmingham. CitiExpress was formed in 2001 by the merger of four regional carriers.