The war on discount air fares has continued this week with BA announcing further price cuts and Bmibaby seeking a third UK base.

British Airways said on Wednesday that it was offering savings of up to �200 on long haul flights this winter.

It boosted the discounts on Thursday, announcing that it would also be rolling out a further series of low fares to European destinations before the end of August.

Meanwhile BMI's discount carrier, Bmibaby, launched earlier this year as a rival to the likes of Easyjet and Ryanair, revealed it was looking to increase its routes by finding a third UK base.

Full fares a thing of the past?

BA is Europe's largest airline but has struggled to keep pace with budget operators, especially on shorter European routes.

It has already cut fares on flights to a number of UK and overseas destinations, but warned earlier this month that revenues remained under pressure.

The company said it had seen a significant rise in passengers flying on discounted off-peak flights, and an "encouraging" response to new offers.

(We) believe that further potential exists for Bmibaby

Tony Davis, Managing director, Bmibaby

BA shares have jumped over 15% in the last week to 65p on news of the next round of price cuts.

But they are still worth only one fifth of their value a year ago.

Competition hots up

Meanwhile, Bmibaby has gone from strength to strength.

The carrier signed up more than 10,000 customers in a week when it opened bookings for flights from Cardiff, which are due to begin in October.

This will be the airline's second base after East Midlands airport.

On Thursday, the company said it was now looking to fly discounted routes from a third UK base.

Tony Davis, Bmibaby's managing director, said the "exceptional start" experienced at East Midlands, and the positive reaction from Cardiff, meant the company had "the confidence to believe that further potential exists".