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OpenSkies - open cheque book

British Airways' launch of OpenSkies, the business-focused carrier that took off from Paris Orly for New York this morning, may be considered a brave move.

Circumstances have changed since Willie Walsh unveiled plans for the subsidiary in January. The oil price has soared, demand declined and the outlook soured.

BA's focus on the US business market to Paris would be sensible at almost any other time. OpenSkies looks an attractive proposition and BA's reputation in the US remains strong despite the recent history of mayhem at Heathrow, misplaced bags and fines for collusion on setting fuel surcharges.

But US carriers are hurting more than most, partly due to a downturn in domestic traffic, and that may have consequences for OpenSkies.

As Virgin America is discovering, this is a tough time for US start-ups. The airlines may be very different, but OpenSkies and Virgin America share three characteristics - they are new, they offer quality and they trade on an established brand. That has not stopped Virgin America announcing a 10% cut in services after 10 months in the air.

At the same time, price pressure on transatlantic routes - generally among the world's most profitable - will be intense. The open-skies regime that provided the opening for BA at Orly could hardly have come at a worse time in the boom-and-bust cycle of aviation.

More particularly, by establishing a subsidiary employing staff on different contracts to those at BA, Walsh has antagonised the airline's mainline pilots.

Having voted overwhelming to strike in protest, only to be thwarted by an ultimately untested legal challenge, BA flight crews may prove underwhelmed by the airline's enthusiasm for OpenSkies and the innovations managers anticipate trialling and possibly extending to BA. Might a legacy of ill-feeling find expression down the line?

BA has cash to burn, of course - but so does Air France-KLM, with which OpenSkies will go toe-to-toe from Paris. The subsidiary should not prove terribly costly, but the wisdom of sacrificing cash reserves at such a time may come into question.

Walsh says he is prepared to lose money on OpenSkies for three years. He may have to.

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