British Airways Considers a New Short-Haul Subsidiary From Gatwick Airport

British Airways is working on options for its short-haul operations at London's Gatwick airport, seeking to curb costs in the face of stiff competition and tight restrictions in its home market.

The company, owned by London-listed IAG, did not specify what the proposals were, but the Wall Street Journal had earlier reported that the airline was considering folding the operations into a new unit.

"We are working with our unions on proposals for a short-haul operation at Gatwick. We are not prepared to comment further while this process continues," the airline said in an e-mailed statement on Thursday.

The pandemic recovery at British Airways, usually IAG's most profitable airline, has fallen behind the group's Spanish units Iberia and Vueling as Britain steered through tougher and longer restrictions than Europe.

IAG itself has adopted a more cautious tone on recovery than its competitors. In July, the company forecast summer capacity would rise to just 45% of pre-pandemic levels versus outlooks of 60% to 70% from Air France-KLM, EasyJet and Ryanair.

(Reporting by Priyanshi Mandhan and Pushkala Aripaka in Bengaluru; Editing by Devika Syamnath)

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