BA cuts down European fares by 50%

BA cuts down European fares by 50%

	Published : Fri, 21 Apr 2006 11:55 By : Andrew Stead Print this Story

LONDON: British Airways Plc. has reduced its fares on more than 65 European routes by up to 50 per cent, taking on the price war threats posed by budget airlines, chiefly, Ryanair.

The airline said one-way fares on the European routes will now begin at 29 pounds. The fares within Britain and Europe would fall by an average of 70 per cent compared with a decade ago.

One-way fares from London to Bordeaux or Manchester will start from 29 pounds, while the fare for Amsterdam will be around 32 pounds. Tickets to Nice, Naples, Venice and Barcelona will start at 39 pounds.

The airline will continue to offer complimentary food and drink on board, while baggage allowances will be free. These facilities are not available with the budget airlines. However, BA passengers will have to pay a fuel surcharge of 8 pounds.

BA had announced Tuesday fuel surcharges on its long-haul routes will go up to 35 pounds from 30 pounds, while it retained the 8-pound surcharge on shorter routes such as in Europe.

The airline expects its fuel bills for the year to go up by 600 million pounds to 2.2 billion pounds.

While BA has reported profits in its operations, it has been found to be losing on short European routes where budget airliners like Ryanair and easyJet have been eating into its revenues. Ryanair has no fuel surcharge and it derives benefit from long term hedging on fuel buying.

There are analysts who believe the fare reduction is part of a promotional campaign by BA to attract travellers during the busy summer period.

However, BA said the reduction in fares is not a gimmick but a long term commitment. A spokesperson said the new pricing will affect about 7 million seats a year.

Another major European airline, Germany's Lufthansa, has said it is planning lower fares for its European flights. The airline already has return flights costing 99 euros originating from Hamburg and Duesseldorf in recent months.

Ryanair responded to BA's price cuts by saying BA needs to be more honest and transparent with its pricing. Its deputy chief executive, Michael Cawley, said his airline's fares are still only a fraction of BA's even with their so-called fare 'shake-up'.

easyJet said it is not concerned with the price cuts as the reduced fares applied only to one-way flights and return fares are not cheaper.