British Airways is gearing up to sell control of its OpenSkies premium transatlantic operation, although it intends to retain a degree of interest in the carrier.
The carrier has recruited a London-based investment bank, Reynolds Partners, to explore options for the airline.
OpenSkies operates all-business Boeing 757-200s from Amsterdam and Paris to New York, but the collapse of the premium market has already forced BA to hold back on expanding the airline.
BA is confining itself to saying that it is "reviewing all aspects" of its activities, given the economic environment and the financial pressure on the carrier.
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But a spokeswoman for BA points out: "OpenSkies is a small part of our business and its losses are not significant compared with losses in other parts of the company."
Reynolds Partners declines to comment on the issue.
But the bank has recently appointed former BA head of joint ventures and investments Tim Hammond to lead a newly-created transport division, and Flightglobal sister publication Air Transport Intelligence understands that he will take charge of the OpenSkies assignment.
A source familiar with the situation confirms that BA is to task the bank with assessing options for OpenSkies and, although the carrier is not setting a timescale, it expects to have an initial idea of possible paths within "a couple of months".
"The issue is really that BA does not want to put investment in to make this work, but wants to remain involved," says the source, indicating that sale of a majority shareholding appears to be the preferred outcome.
Despite the depressed economy, the source adds, there are already "several potential interested investors" in the carrier and a view that the OpenSkies business, in principle, is "potentially very good".
BA has already committed to grounding and selling its 11 remaining mainline 757-200s rather than use them to reinforce the OpenSkies fleet. Eight will be parked this winter and the other three in summer 2010.
When BA pushed through the creation of OpenSkies last year - risking a revolt by mainline pilots in the process - it set a target of profitability within three years.
But the premium travel sector has been badly hit by the economic crisis. BA chairman Martin Broughton even warned shareholders this week that the market for premium travel "may never fully recover".
OpenSkies' management has remained upbeat about the carrier's performance and prospects. The carrier, which began services in June last year, subsequently took over the similar French carrier L'Avion. It has a fleet of four 757-200s, operating under a single brand.
Source: Air Transport Intelligence news
