BA's franchising goes offshore

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Max Kingsley-Jones/LONDON

BRITISH AIRWAYS has announced its first offshore franchise deal, with Sun-Air of Scandinavia. The UK carrier expects the deal to be the first of similar international agreements.

The link with Sun-Air is effective from 1 August, and will provide the carrier with a Scandinavian regional network to connect with BA services to Copenhagen, Oslo and Stockholm. Sun-Air, based in Billund, Denmark, will operate all its services as British Airways Express, and its Jetstream 31s and 41s will be repainted in BA colours. No BA equity investment is involved.

BA has pioneered the concept of US style "Express" feeder services in Europe, but, until now, has limited its franchise agreements to UK-based regional airlines. Gatwick-based CityFlyer Express was the first of several franchise partners, in 1993, and the business now turns over £50 million ($75 million) annually. The Sun-Air franchise is believed to be the first such international link anywhere in the world.

BA chief executive Bob Ayling sees further international opportunities: "This agreement represents the first time we have extended our franchise beyond the UK. We believe it has considerable potential beyond Britain and are talking to interested parties with a view to exporting the brand further afield in the not to distant future."

Sun-Air was founded in 1979 and began scheduled operations in 1991. The airline operates some, 250 departures a week, with a fleet of ten 18-seat J31s and two 30-seat J41s. Sun-Air carries 120,000 passengers annually, on its scheduled services. It plans eventually to replace its smaller Jetstreams with the larger model.

British Airways is forging closer marketing links with Canadian Airlines International, lending credence to unconfirmed reports of an imminent equity alliance with American Airlines. The US carrier has a 33% stake in Canadian and is known to want fuller integration of US-Canadian schedules.

American, the world's largest airline, is also the only major US carrier without a transatlantic alliance, and is fast running out of candidates. It also appears to have modified its antipathy towards code-shares, as indicated by its recent agreement with Israeli airline El Al.

British Airways has been disappointed with its investment in USAir and it has already indicated that it will not put any more money into the struggling airline.

The closing of the American/ Canadian/British Airways triangle, together with the USAir association, would create the world's largest global alliance, an ambition already achieved in part by British Airways and sought-after by American Airlines.