01 September 1997

PEEVED AT inroads made into its lucrative short-haul market by the growing rash of 'no frills' low-cost carriers, British Airways is actively considering setting-up a direct-sell discount subsidiary with its own corporate branding. The service would probably fly out of London Stansted [a venue previously regarded by BA as only marginally prefererable to Chernobyl], although it has not ruled-out Luton. The plan is not to the liking of low-cost pioneers Virgin Express, DebonAir Ryanair and easyJet. The two latter companies have been targeted at different times by British Airways as possible acquisitions and easyJet is concerned that commercial information BA obtained during negotiations may be used to set-up the rival airline. EasyJet chairman Stelios Haji-Ioannou threatened legal action against the world’s favourite airline if it goes ahead with the plan, saying he believed BA's sole purpose would be to drive companies such as his out of business.