February 8, 2017 / 3:36 PM / 6 months ago

Barcelona hub a 'start' for BA owner's budget long-haul flights

British Airways aircraft taxi at Heathrow Airport near London, Britain October 11, 2016.Stefan Wermuth/File Photo

BRUSSELS (Reuters) - British Airways and Iberia owner IAG is looking to offer low-cost long-haul flights from airports other than Barcelona in its efforts to compete on trans-Atlantic routes.

IAG said late last year it would start budget flights to U.S. destinations in June, using its budget short-haul brand Vueling, which has its hub at Barcelona's El Prat airport, to feed passengers to the longer routes.

"This is the start of something that will be a significant part of IAG...We think Barcelona is a great place to start," IAG's chief executive Willie Walsh said on the sidelines of an aviation conference in Brussels.

Rival low-cost carriers Norwegian Air Shuttle and Wow Air are stepping up transatlantic flights, while IAG rival Lufthansa has also started budget long-haul flights using its Eurowings brand.

Walsh said the changes in the competitive landscape had encouraged IAG to look at new operating models.

"It's good to see how consumers have responded to the customer proposition that he (Norwegian CEO Bjoern Kjos) has put in the market and that's encouraged us to look at doing different things."

IAG would start selling tickets for the new Barcelona routes "very soon", Walsh said, without specifying when.

The company's new budget operation would not be operated by Vueling, which is focused on short-haul, nor would it use the Aer Lingus name because that brand is not as well known outside of Ireland, Walsh said.

Separately, IAG was not planning to change its hedging policies despite the fall in the value of the pound since Britain's vote to leave the European Union which forced it and other carriers to lower profit expectations, the CEO added.

Writing by Victoria Bryan; Editing by Alexander Smith

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