BA 'reviews future' of German unit

Deutsche BA competes with Germany's flag carrier, Lufthansa

The future of British Airway's German subsidiary has been thrown into doubt following reports that the unit may be sold or even closed.

BA, which has been undergoing a widespread shake-up in an effort to revive profits, has declined to confirm a newspaper report that it has began a review of its German arm, Deutsche BA.

"We have no comment on these speculations," a BA spokeswoman said on Monday.

But she added that it was a "natural process" that a parent company "would review the business development of its unit" in view of losses.

Company shake-up

The statements follow a report in Sunday Business newspaper that Deutsche BA may be ditched after running up losses estimated at £15m.

A sale would represent a reversal of fortune for Deutsche BA, whose former chief executive, Carl Michel, was at one stage tipped to replace Bob Ayling as chief executive of BA last year.

Mr Ayling was instead replaced by Rod Eddington, who has spearheaded a transformation which includes the axing of routes, the revival of plans for closer working with American Airlines, and the return of the Union Jack emblem on plane tailfins.

BA nonetheless last week reported a halving in operating profits, and Mr Eddington is thought keen to implement other reforms to streamline the business.

Deutsche BA, which flies in BA colours, is Germany's second largest domestic airline, and operates in competition within Lufthansa.

BA shares were unchanged at 324p in late trade on Monday.