BA joins premium transatlantic competition

Last year I wrote about so-called 'boutique airlines' - airlines which catered exclusively to the first- and business-class markets - and also looked at the expansion of these types of airlines across the Atlantic, where they have been most prolific. A handful of these 'boutique airlines' include Maxjet, Eos, and Silverjet, which fly between the New York area and London. There's also L'avion, which flies between Paris-Orly and Newark. All four fly specially configured Boeing 757s or 767s in a business or first-class configuration.

Now British Airways is foraying into this group of carriers, which target the upscale leisure traveler but mostly the business traveler. It announced that beginning in the summer of 2008 it would start flying all-premium class transatlantic services. However, the interesting part is that it wouldn't just be to and from the UK - BA is looking at service from a US city (probably New York) to various European cities like Paris, Madrid, Frankfurt, Milan, and Zurich. The chief executive of BA, Willie Walsh, said that the airline would probably - like the 'premium competition' - use Boeing 757s and/or 767s, which are smaller than the 747s and 777s that the airline currently uses on transatlantic routes.

This seems like a natural choice for BA, which has accomplished a lot with its first and business class products. But these have come under increasing pressure from the start-up 'boutiques', so BA is trying to hit back with a 'boutique' of its own. However, the fact that it wants to fly between the US and other European cities, not just the UK, is a bit more surprising, and also a gamble. Analysts have pointed out that BA has lost money before in such moves, so we'll have to see if they will be successful this time round. In any event, the move certainly will increase competition on the transatlantic routes and bring the battle for premium customers beyond the 'boutiques' - airlines like Air France and Lufthansa, BA's main competitors, will have to look out as well.