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OpenSkies to suspend services between Amsterdam and New York

In order to stem its losses, the all business-class subsidiary OpenSkies will suspend its services between Amsterdam and New York from mid-August as stated by the chief executive Dale Moss, “The economic environment has produced a significant drop in demand.”

However, inspite of the fact that OpenSkies will continue to operate between Paris Orly and New York, the future of OpenSkies is still stated as “under review”. The unit has recruited investment bank Reynolds Partners to explore options for raising capital and is believed to be considering selling a majority stake in the subsidiary.

After the deregulation of flying between the US and Europe on March 30 2008, OpenSkies began flying in June last year. The regulation allows airlines to fly from anywhere in Europe to anywhere in the US.

BA established the subsidiary at Orly. OpenSkies began flying from Amsterdam last October. When OpenSkies started its operation, there was a fear of strike by BA pilots as the pilots feared OpenSkies would be used to water down contractual terms. However, their strike was called off when pilots’ union Balpa said it could not afford a long legal battle.

However, OpenSkies has suffered from plunging premium traffic and further expansion plans were cancelled late last year. BA reported a 14.9% fall in premium traffic across its operations in the year to June.