You are here

BA's owner launches new trans-Atlantic budget airline

BA's owner launches new trans-Atlantic budget airline

BA’s owner IAG launches its new trans-Atlantic budget airline, Level, with its first flight from Barcelona to Los Angeles on Thursday.

Over the next three weeks Level will roll out flights to San Francisco, Buenos Aires and Punta Cana in the Dominican Republic.

Fares start from £99 one-way and have been on sale since March.

Parent company IAG, which owns Iberia, BA, Aer Ingus and Vueling, said it sold 100,000 tickets in the first month.

BA has been at the centre of controversy following a disastrous computer crash that stranded 75,000 passengers over the weekend.

Critics have said that BA has been relentlessly cutting costs to take on competition from budget airlines. BA denies that this caused the IT problems which it blames on an electrical power surge.

But its owner IAG Group is now pinning its hopes on the new airline to help it compete in an increasingly aggressive trans-Atlantic market.

Pricing structure

Level’s pricing structure is divided into six types of fare. The most basic includes hand luggage only.

The most expensive is Flexible Premium Economy which offers a hot meal, two checked bags, and seat selection. Wifi is available - at prices starting at 8.99 euros.

It will start out with flight and cabin crew from its sister airline Iberia and will create up to 250 jobs based in Barcelona.

IAG chief executive, Willie Walsh, said: “This is just the start. In summer 2018 we will have more aircraft and will operate more destinations from Barcelona. We’re also planning to expand Level operations to other European cities.”

Norwegian competition

The competition has ratcheted up since the arrival of the Boeing 787 Dreamliner in late 2011. The plane, made from composite materials was lighter, more fuel efficient and cheaper to fly than any of its predecessors. Aerospace analysts considered it a game changer for the airline industry.

The Oslo-based budget airline Norwegian jumped at the opportunities the new aircraft offered. It now has 13 Dreamliners in service with 30 more on order to fly passengers from cities including London and Paris across the Atlantic.

This year Norwegian started offering $65 fares for a one-way ticket between smaller airports in the UK and Ireland to similar destinations in New York state, Providence, Rhode Island, and Hartford, Connecticut.

Crowded market

Level has taken a different tack, opting for the latest Airbus A330 aircraft, designed specifically to compete with the Dreamliner, and fitted with 293 economy and 21 premium economy seats.

But the trans-Atlantic budget air space is about to get very crowded. From July Iceland’s budget airline WOW will be offering flights from London Gatwick, Bristol and Edinburgh to Chicago from £139, and Lufthansa’s Eurowings subsidiary will be increasing its low cost offerings to Orlando, Florida and Seattle.

Let’s block ads! (Why?)

Source: BBC Business

Related posts