Original article from Kent Live
British Airways is planning a new subsidiary that will operate short-haul flights at Gatwick Airport and rival budget airlines such as Ryanair, Wizzair and EasyJet.
A “BA Lite” operation is underway in a bid to help make the Sussex airport profitable after BA suspended domestic and European routes serving Gatwick during the coronavirus pandemic, The Mirror reports.
It coincides with the ending of the government’s furlough scheme next month with new British Airways chief executive, Sean Doyle, hoping to cut costs to make BA more competitive again.
The airline has launched consultations with trades unions – telling them that change is essential if British Airways is to return to the Sussex airport at scale.
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But the move is likely to put the IAG-owned carrier on a collision course with unions if staff are put on less generous contracts.
An internal letter to staff, seen by the PA news agency, said: "This was previously a highly competitive market, but for us to run a sustainable airline in the current environment, we need a competitive operating model.
"Because of that, we are proposing a new operating subsidiary to run alongside our existing long-haul Gatwick operation, to serve short-haul routes to/from Gatwick from summer 2022.
"This will help us to be both agile and competitive, allowing us to build a sustainable short-haul presence at Gatwick over time."
The letter said that the "cautious approach of governments" has undermined customer confidence and means the recovery of air travel "remains far behind where we need it to be".
Employees were told that the airline's pay costs will "steeply increase" once the UK's furlough scheme ends on September 30, which is "bad news".
The message stated that BA's schedule and operating costs for the remainder of the year "will not line up".
It added: "We believe that this will be a temporary problem, but it's a serious one which we need to manage.
"This means we're going to have to be as flexible as possible when it comes to the way we work, to help mitigate the situation over the coming months."
BA said in a statement it is "working with our unions on proposals for a short-haul operation at Gatwick".
Informally, some people have dubbed the venture “BA Lite”. Other likely names are British Airways Express, mirroring Iberia Express – the lower-cost offshoot of BA’s Spanish sister airline.
The carrier is likely to begin operations at the start of the next summer season in late March 2022 – in time for the Easter school holidays.
Martin Chalk, acting general secretary of pilots' union Balpa, said: "Balpa cautiously welcomes this decision to restart BA short-haul operations at London Gatwick and create a number of much-needed new pilot jobs.
"Balpa and BA are in the final stages of negotiations over the revised pay and conditions for Gatwick-based BA pilots and we hope to bring these talks to a conclusion shortly."
IAG already has several low-cost airlines including Vueling and long-haul specialist Level. BA itself created a budget brand, Go, in 1998 as it fought easyJet and Ryanair but sold it three years later.
Last year British Airways reported a 70% fall in annual revenue that drove it to a £3.9billion operating loss.
On Wednesday (August 25), Gatwick announced a £500million plan to create a permanent second runway by widening the main taxiway.