EasyJet to acquire GB Airways as BA axes its UK franchises

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

British Airways (BA) chief executive Willie Walsh is axing the airline’s franchise agreements with GB Airways and Scottish regional carrier Loganair, claiming they have outlived their purpose.

The move coincides with EasyJet’s planned acquisition of GB Airways, which was revealed 25 October and is expected to be completed within eight weeks at a cost of £103.5 million.

Walsh says: “UK franchises have outlived their purpose. EasyJet has made an offer to buy GB Airways and this has enabled us to end the franchise agreement early. We had an option to buy GB Airways but we rejected it.

“We have a significant base at Gatwick and our focus will be on maintaining and developing it as an integral part of our business.”

BA will end its GB Airways franchise agreement on 29 March 2008 and will instead operate some of its franchise routes directly.

From 30 March next year BA will launch its own Heathrow-originating services to Faro and Malaga. It will also serve Faro, Gibraltar, Ibiza, Malaga, Palma and Tunis from Gatwick.

BA’s franchise partnership with Loganair will end on 25 October 2008 and will be replaced with a codeshare arrangement. BA is also due to end its franchise agreement with BMED, which was acquired by BMI earlier this year, on 27 October.

GB Airways will sell its four valuable pairs of London Heathrow slots owned by its parent Bland Group. These  were excluded from EasyJet’s acquisition of the carrier

Speaking during a conference call, EasyJet CEO Andrew Harrison said: “EasyJet has never operated from Heathrow and because it is such a congested and high-cost airport we have got no plans to operate from Heathrow.

“It really doesn’t fit the EasyJet model and so what will happen is that GB Airways is in the process of selling its Heathrow slots. The slots are owned by GB Airways and they will sell them on for the best price.”

GB Airways was tight-lipped about the future of the four slot pairs, although a spokesperson for the carrier confirmed: “The slots will be disposed of.”

In the statement announcing the acquisition, the carriers said: “GB Airways’ Heathrow slots will be sold under three separate exchange agreements the consideration for which will be passed on to the Bland Group on receipt.”