Why Are British Airways’ London City Flights Operated By A Subsidiary?

If you’ve ever flown British Airways from London’s City Airport, you might have noticed the words ‘operated by Cityflyer’ on your ticket, booking information, or indeed on the side of the aircraft. Cityflyer operates to a number of domestic and regional destinations but is the exclusive operator for BA at LCY. Let’s find out why.

Cityflyer British Airways LCY
If you get a BA flight from LCY, it will be operated by Cityflyer. Photo: London City Airport

BA can’t fly into LCY any more

The first and most obvious reason is that British Airways can no longer fly into London City Airport with any of its current fleet. The airport’s relatively short runway and required steep approach means it is restricted to allowing only aircraft up to the size of the Airbus A318 to land.

British Airways did have a couple of LCY-based planes. Its small fleet of two A318s would fly from the city center airport to New York JFK, in a premium-heavy configuration and with a stop in Shannon, Ireland. However, its fleet shrank to one in 2017, and then in March last year, with the pandemic throwing the industry into chaos, the final baby bus was retired.

Now, with the A319 the smallest aircraft in BA’s fleet, it is unable to land at London City anymore. BA-owned subsidiary Cityflyer, on the other hand, operates 24 Embraer regional jets, mostly of the ERJ-190 size. These aircraft are ideally sized to fly into LCY; small enough to meet the tight operational challenges, while still allowing a decent number of passengers to use the service.

Cityflyer British Airways LCY
The steep approach and take-off means only certain aircraft can operate from LCY. Photo: Getty Images

While that explains why only Cityflyer operates from LCY at the present time, it doesn’t entirely answer the question. Surely it would be easier for BA to simply buy its own regional planes and fly them into the central London airport?

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Why do airlines have regional subsidiaries?

The idea of a regional arm of the mainline airline is a model that is replicated all over the world. While some airlines (like BA) entirely own their regional subsidiary, others contract out these services to wet lease airlines. This is frequently the case in the United States, where airlines like PSA, SkyWest, and Envoy Air fly regional services under brand names like Delta Connection and American Eagle.

The reason this model has proven so popular comes down to a few key elements. Firstly, it’s about the preservation of the mainline brand and reputation; secondly, it’s about running a very different type of business; and finally (and most crucially), it’s about money.

Cityflyer British Airways LCY
BA’s strategy of keeping regional operations with a subsidiary is one that is common the world over. Photo: London City Airport

By operating regional services through a separate company, the mainline brand gets to receive all its feeder traffic at its hubs without tarnishing the reputation of the mainline airline. For instance, the mainline airline might want to advertise that it has seatback entertainment at every seat; the fact that its regional arm doesn’t is considered separate, and therefore still allows them to make this claim.

As a further example, the mainline airline may have an average legroom score that it is proud to maintain, while its regional airline likes to pack people a little more tightly. This could be extended to food, amenities, and service levels too. By keeping the two separate, the performance and passenger experience on the regional subsidiary doesn’t drag down the score of the main airline.

As well as the brand benefits of keeping things separate, operating a regional airline is very different from operating the mainline. There are many different scenarios, operational challenges and nuances about the b business model that makes it a very different beast from its mainline sibling. Therefore, it makes sense to keep it separate and have personnel within that business that are 100% focused on regional operations.

Cityflyer British Airways LCY
Keeping the subsidiary focussed on regional operations only can help it perform better in the long run. Photo: Getty Images

Finally, and most likely the most compelling reason for keeping regional operations as standalone businesses – money. There can be tax benefits to having separate entities in this way. Moreover, the contracts of employment are separate and can therefore be different. This means regional subsidiaries are able to employ pilots, cabin crew and ground staff on less favorable contracts than the mainline airline, which works in the parent airline’s favor.

Have you flown Cityflyer or another airline’s regional subsidiary? Was your experience very different from the mainline brand? Let us know in the comments.