British Airways is to relaunch its budget airline as part of a bid to improve profits and compete more effectively with low-cost rivals such as easyJet and Jet2.com.

Europe's third largest airline said today that BA Connect, the new name for CitiExpress, will offer a single class of ticket on all aircraft and one-way fares from as low as £25 throughout the year.

The airline, which is working to improve the profitability of short-haul flights, also said BA Connect would offer a business and frequent flyer service called "BA Connect Plus". Prices here will start from £110 one way.

Hot and cold catering services will be available on board and BA's starting prices on tickets include taxes, fees and other charges.

BA Connect will take to the air on March 26.

Flights to domestic and European destinations will run from regional airports such as Manchester, Birmingham, Edinburgh and London City. The idea is to avoid bigger and more expensive airports such as Heathrow and Gatwick.

David Evans, the managing director of British Airways CitiExpress, said: "The restructuring of the regional business will set us apart in this fiercely competitive market.

"We have an innovative service promise for business and short-break leisure air travellers, offering year-round, one-way prices that match the no-frills airlines and the added service promise and resources of an airline of British Airways’ size and stature.

Mr Evans added: "The move is a direct response to changing customer needs and the challenges that have emerged in the marketplace since the creation of British Airways CitiExpress. We know air travellers value British Airways’ distinctive brand and the wide range of benefits associated with a full service airline at competitive prices."

BA declined to detail how much it planned to invest in the relaunch, which will be backed by a "major" sales and marketing campaign. However one source close to the company said it would "not be a large amount; there's not a large upfront investment, most of what's needed is already in place".

Aircraft livery and staff uniforms will be unchanged, according to the airline, although the BA Connect name will be embossed on aircrafts' fuselages.

BA carried 3.8 million passengers last year to a total of 32 separate destinations from 14 airports in the UK. Although the airline reported last week that passenger numbers were increasing, it has faced stiff competition from lower-cost rivals able to undercut it on prices.

Shares in BA, which is listed in the FTSE 100, were trading down 6.5p this morning at 324.5p, as shares on the wider market also fell.

For detailed information on BA shares click here

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