As FLYGRA and Sleak76 have stated, BA
has been working hard to reduce its debt, and everything seems to indicate that it will continue to do so. The Future Size and Shape programme initiated by Rod Eddington has delivered bigger than expected cost savings in a shorter than expected time space. Also, despite BA
posting a profit Eddington remains determined to keep driving down costs. His stategy is very much about establishing BA
on a much firmer footing for the long term, and this means not stopping the reforms now.
Bostonguy, exactly what LCC subsiduries does BA
have? Go was sold a few years back. GB
Airways, the LGW
based franchise carrier has taken over a couple of former BA
routes to France in the past couple of years, but it has added lots of its own too. BA
CitiExpress, the regional operation, has slashed many routes, not picked them up from BA
, with the possability of more going if nothing is going to replace the Dash 8s in its fleet by next March. What BA
has been doing is to increase the profitability of all its operations. Perceived wisdom is that throughout the 1990s BAs shorthaul operations were not only loss making but cross-subsidised by the longhaul routes. Now, it is rumoured BA
is close to, if not actually, breaking even on shorthaul operations. It has been offering low fares, increased aircraft utilisation, cutting excess capacity, but still reamining full service. If it is true that its shorthaul operations have been turned around so much then I think, IMH, that this shows how BA
has strengthened itself.
So to answer the original post I don't think BA
could go bankrupt in the forseeable future. If it got in such a position that this could happen, I actually think it would be allowed to happen. The political fallout would be huge whatever decision was made, but allowing BA
to go under would I believe be the more likely. Massive state intervention is not going to happen, especially where so many carriers can fill the void.
On a separate note it is probably sad to say that there is more chance of bmi going under than BA
- and that certainly would be allowed to happen. BCal got taken over by BA
when it was in poor financial health, and both Dan-Air and Air Europe went under in the early 1990s. VS
is making money, though bmi is still loss making.