British Airways abandons plans for new budget airline at Gatwick

BA planes

British Airways is poised to scrap almost all short-haul flights from Gatwick after pilots rejected the carrier's plan to set up a new budget airline and hand them sweeping pay cuts.

The decision means that Britain’s second-biggest airport now faces the spectre of losing its second-largest short-distance operator as the travel industry struggles to recover from the Covid crisis.

BA had hoped to set up a new subsidiary at Gatwick to compete with low-cost carriers such as easyJet and Ryanair, but rhe overhaul would have left some pilots being paid less than their easyJet counterparts. The pilots' union Balpa recommended the deal, but members rejected the reforms at the ballot box last week.

Jason Mahoney, the company's operating chief, wrote to pilots on Thursday to say that talks to agree a new deal had failed.

He said: “Following Balpa’s decision to shut the ballot down last week we’ve engaged in further discussions with them, but despite us being able to resolve the outstanding contractual issue, Balpa have made the decision not to continue with the ballot.

“It is therefore with regret that we are now in the position that we will suspend our short-haul operations at Gatwick, with the exception of a small number of domestic services connecting to our long-haul operation."

BA sought to launch a budget arm after warning that it could no longer shoulder loss-making operations at the airport and needed to significantly reduce costs.

Its decision to abandon the move comes after the operator racked up a record €7.4bn (£6.4bn) loss for 2020 following a near-total collapse in air travel. Bosses hope that a return of long-distance flights to the US announced earlier this week will help turn around the company's fortune.

Mr Mahoney said: “We believed we could build a competitive BA-branded short-haul operation out of Gatwick. But to make this happen, we would have to turn a loss-making operation into a profitable one."

The collapse will come as a blow to BA's chief executive, Sean Doyle, who last week told staff that the airline was starting to recover after being crippled by the pandemic.

A BA spokesman said: "We're disappointed that our plans for a new short-haul subsidiary at Gatwick have not received Balpa's support. After many years of losing money on European flights from the airport, we were clear that coming out of the pandemic, we needed a plan to make Gatwick profitable and competitive.

“With regret, we will now suspend our short-haul operations at Gatwick, with the exception of a small number of domestic services connecting to our long-haul operation, and will pursue alternative uses for the London Gatwick short-haul slots.”