British Airways set to ground flights

British Airways is preparing to ground flights and scale back on capacity in the near future, as the record high price of oil gives even the largest airlines cause for concern. The London Telegraph reported that the UK flag carrier’s chief, Willie Walsh, would review the airline’s flights “on a route by route basis” in order to determine what should be cut, in an effort to minimize losses. Walsh gave a presentation earlier today at a meeting of the International Air Transport Association (IATA), where he also indicated that BA could mothball some of its older planes, in an attempt to save money. If British Airways does, in fact, go this route, it will follow the example of Australia’s Qantas, which decided to adopt this approach earlier in the year.

Walsh noted that all airlines are in “unchartered waters” and that there seems to be no other choice but to review routes and cut down on ones that are unprofitable. BA’s chief went on to say that it “does not make sense” to maintain flights or routes that either hinder the carrier’s financial situation, or do not contribute anything positive to it, especially when the price of oil continues to hover at around $130 per barrel. Although Walsh emphasized that the carrier continues to have a “healthy balance sheet”-which is more than what some of its competitors can claim-BA still cannot afford to be “complacent” in the current circumstances.

Some in independent observers, however, have pointed out that it is not likely that British Airways will cut many of its routes altogether. What is much more probable is that the carrier will reduce service and capacity on routes that continually underperform.

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