Blue Sky prepares for launch as PAL 737-300s are secured

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Max Kingsley-Jones/LONDON

British Airways has secured a fleet of eight Boeing 737-300s to launch its low-fare subsidiary at London Stansted Airport. The airline, known as Operation Blue Sky, has also applied for its operating licence.

The airline, which is believed to be aiming for a launch in April, has filed for its licence, listing Speedbird House, BA's headquarters at London Heathrow Airport, as its registered office. This is despite BA's clear intent to project an arms-length relationship with the new spin-off, which has seen functions such as flightcrew recruitment contracted to external sources.

The new airline, yet to be officially named, has secured the lease of eight secondhand 737-300s from General Electric Capital Aviation Services (GECAS), with deliveries set to begin in April. The eight- to nine-year-old aircraft are on lease to Philippine Airlines (PAL) and were not due to be returned to GECAS until 2000, but the carrier is to terminate the leases early. The aircraft, to be replaced by new Airbus A320s, will be returned to GECAS between February and October 1998.

Although sources suggest that Blue Sky's name and route plans are set to be unveiled imminently, the airline declines to confirm this, stating simply that "-things will start happening in the spring".

The carrier, which is expected to launch several routes to continental Europe destinations in competition with the established low-fare carriers, has struggled to find aircraft in time to launch services and, at one time, considered diverting its A320s to Stansted to fill the gap.

Separately, BA Regional (BAR), the BA division which operates from Birmingham and Manchester in the UK, has introduced the first of seven new 737-300s on lease, replacing six 737-200s. It is understood that the first 737-300 for BAR was recently temporarily painted in Blue Sky colours for a promotional photo-shoot.

BA is already in negotiations with Airbus Industrie and Boeing about the acquisition of either A320 family aircraft or Next Generation 737s to replace BAR's remaining 737-200s, the first of which should be introduced in 1999.

Negotiations for BAR's new fleet are part of BA's wider requirement for more than 100 120- to 160 seaters, which are needed to replace BA's Gatwick and Heathrow-based 737s.

The order, which should be finalised by mid-1998, is also expected to include aircraft for BA's mainland European subsidiaries.