More than one-third of British Airways' operating profits could be wiped out if Europe and the United States agree a deal in coming months to liberalise the transatlantic air market and open up Heathrow to all comers, according to new estimates circulating in the City.
Chris Avery, the respected aviation analyst with JP Morgan, says in a research note published yesterday that an "open skies" agreement between the two would "hurt BA's profits materially" in the first couple of years as new carriers entered Heathrow and slashed fares to the US. The note does not put a precise figure on the financial impact but investors calculate that BA's operating profits, which reached £540m last year, could fall by £200m. That would translate into a £200 reduction in the fare paid by every BA business-class passenger between Heathrow and the US.
The calculations come as the open-skies talks reach another key staging post today when the deadline passes for responses to the latest plan put forward by the US administration for clinching a deal.
The Independent
Chris Avery, the respected aviation analyst with JP Morgan, says in a research note published yesterday that an "open skies" agreement between the two would "hurt BA's profits materially" in the first couple of years as new carriers entered Heathrow and slashed fares to the US. The note does not put a precise figure on the financial impact but investors calculate that BA's operating profits, which reached £540m last year, could fall by £200m. That would translate into a £200 reduction in the fare paid by every BA business-class passenger between Heathrow and the US.
The calculations come as the open-skies talks reach another key staging post today when the deadline passes for responses to the latest plan put forward by the US administration for clinching a deal.
The Independent
