“We will continue to position ourselves as a premium airline”: BA

British Airways won’t budge from its strategy of focusing on premium travel even as the recession saps demand for its most lucrative services across the North Atlantic.

According to a report filed by Bloomberg, Simon Talling-Smith, executive vice president for the Americas, said: “We will continue to position ourselves as a premium airline -- that is absolutely core to our business model.”

Premium traffic at BA has fallen for 10 straight months, with June’s near 15 percent decline comparing with a slide of 1.3 percent in economy-class sales. The drop led to a record 375 million-pound ($611 million) loss in the year ended March 31.

According to Times Online, Talling-Smith said that with nearly 70 percent of businesses slashing their travel budgets and with companies increasingly moving executives into economy class or relying on video conferencing instead of face to face meetings, airlines had their work cut winning back that business. 

“BA’s view is that it will take quite a long time, potentially more than five years, before the full value of the business market returns,” he said. 

“Right now [businesses] are putting more people into economy class. Our business and first class business volumes have fallen by around 15 percent, but economy volumes have fallen by about 1 percent [for the six months to June 2009]. One could reasonably guess that a certain number of business class customers are down trading to economy.”

Annual meeting

Meanwhile, Chief executive Willie Walsh told the company’s annual meeting in London that he wanted to achieve 3,700 job losses by next March on top of 2,500 which have gone since last summer.

“There is no point trying to skirt around the fact that we need a fundamental and structural change to our employee cost base.”

“These changes are essential to our short-term survival and, more importantly, to our long-term viability.”

The airline is exploring a convertible bond issue to raise new funds to help it through a severe industry downturn.

“Our current liquidity is above our desired minimum of 15 percent of revenues,” chairman Martin Broughton said. “However, an extended economic downturn would be stretching.”