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British Airways begins its fight back

Allister Heath
AIRLINES can still put on a great show, as yesterday’s inaugural British Airways flight from City Airport to New York JFK testified. We were treated to water salutes from firefighters, cheerleaders and champagne on tap. And apart from the fun of flying on a brand new, 32-seater all business class luxury Airbus A318, the exercise was a good opportunity to catch up with BA’s top brass, not least Willie Walsh, the firm’s ever-energetic CEO.

The service is of great psychological importance to BA, which needs to show it has regained the initiative in its core business market. It has done a good job of recreating some of Concorde’s glamour, even recycling its famous BA0001 flight-code (tickets start at £1,900, though most seem to be going for £4,000). The recession has forced the airline to chop several Heathrow-New York flights; while the City route will only be worth one per cent of the transatlantic market, every little helps. The new route needs to operate at 70 per cent capacity for BA to break even; Walsh expects the route to make a profit in its first year. With the recession abating, he may well be right.

What of BA’s proposed merger with Iberia? Martin Broughton, BA’s chairman, told me that there is a “renewed sense of urgency” in the talks, following a lengthy period of “radio silence” from the Spanish. The discussions ground to a halt during the recent interregnum period at the Spanish firm; the new management has “reinvigorated the process”. Broughton expects to know one way or the other whether a deal is possible “in a month or so”. He hopes it will be a “yes” but insists that it must be a deal his airline actually wants to do.

The service is also a leap forward for City Airport, until now only home to short-haul flights. Passengers can turn up 15 minutes before departure, and the experience remains incomparably better than Heathrow. Richard Gooding, City’s CEO, was understandably chuffed. The global slump in air travel is ending, he told me, adding that it would be “perfectly possible” to imagine that the current twice daily New York service could be increased if demand materialises. After suffering a decline in traffic in the first quarter, the airport enjoyed flat performances in the second and third quarters. He expects the fourth quarter to be equally stagnant, with growth returning in the second quarter of 2010.

So what of the actual flight? Yesterday’s trip was a success, despite teething problems. A refueling stop-over at Shannon in Ireland is required on the US-bound leg because City’s short runway means it needs to take off with a half-empty tank; but BA has managed to turn this to its advantage. Shannon is home to an army of US Homeland Security officials; the immigration procedures, which were remarkably speedy, took place in their brand-new facilities. We were treated like a domestic flight on arrival at JFK, saving time and hassle.

The on-flight mobile telephony service was more erratic. I was able to work throughout the flight on my laptop and BlackBerry, texting the office and emailing this column; but the service still needs refining and passengers were inconvenienced.

On balance, however, yesterday was a good day for Walsh. He was much more upbeat than when I last met him in the Spring; his fight back has begun in earnest. He is not a man to be underestimated.

allister.heath@cityam.com