BA and Virgin square up over China

BRITISH AIRWAYS has unveiled plans to take the battle for China to Sir Richard Branson's Virgin Atlantic. It has added the boom town of Guangzhou to its wish list of new routes, and opened its first new major route in years yesterday by launching a London-Shanghai service.

But chief executive Rod Eddington says 'there is all to play for' as the Chinese aviation authorities rapidly open up the skies to UK carriers. BA and Virgin will go head-to-head to land 16 new daily services to mainland China - more than double the current capacity.

The new route to Shanghai puts BA in direct competition with Virgin, which has been operating services there for the past six years.

Eddington, who leaves BA this autumn, said the airline is actively looking at a new route to Guangzhou, the capital of Guangdong, the old province of Canton inland from Hong Kong. It is seen as the next emerging market. But he does not want to commit to headlong expansion in China despite the growth potential.

'Guangzhou with its new airport is a very interesting prospect,' he said. 'But the first thing we want to do is is bed down our new Shanghai services and our increased frequencies of three times daily to Hong Kong. In addition, we want to get up to a daily service to Beijing where we have been flying for the last 25 years ... with the increased capacity available, there is all to play for.'

In the longer term, BA is eyeing services to Chengdu and Wuhan, the capitals of enormously populated provinces in the interior that are as yet undeveloped in airport infrastructure terms.

The rush to China mirrors another battle with Virgin, to open up the giant Indian market.

The long history of bad blood between the two carriers has not been helped by rows with the British Civil Aviation Authority over who flies where in India, especially the plum route to the country's commercial centre of Mumbai-Airline insiders are forecasting-similar bloody battles over the carve-up of China.

The country could be on the shopping list of bmi, the former British Midland, which only last month launched its first long-haul flights out of Heathrow.

Meanwhile, BA said traffic rose by 3.2% in May, with its premium cabin performing particularly well. The flag carrier believes bmi has scored an own goal by axeing business class from its UK and European services.

BA chairman Martin Broughton said: 'We believe there is a business market on short-haul and we will not be cutting our business class cabins. We say thank you very much, bmi.'