Flybe has agreed to buy BA Connect’s regional operations. This will create one of Europe’s biggest regional carriers with nearly ten million passengers.
“It has not been meeting its targets - I am really pleased that we have reached an agreement to sell it to Flybe,” Willie Walsh, CEO of British Airways told BBC’s Radio 4.
British Airways will emerge with a 15% stake in Flybe. The enlarged firm will focus on short-haul UK and European major cities. The new entity is expected to generate more than £600 million in revenue.
British Airways announced today that it has reached agreement in principle to sell the regional operation of its subsidiary airline BA Connect to Flybe.
BA Connect also operates from London City Airport and between Manchester and New York. These services will not form part of the proposed sale nor will the regional ground handling business, British Airways Regional Ltd.
Willie Walsh, British Airways chief executive said: “Point to point regional operations are not a strategic part of our business and we believe that such activities are better undertaken by a regional low cost airline.
“Despite the best efforts of the entire team at BA Connect, we do not see any prospect of profitability in its current form.
“The proposed sale to Flybe provides the best opportunity to secure the long-term future for the many dedicated staff in BA Connect. British Airways will have a 15 per cent investment in Flybe on completion of the disposal.
“London City services complement our mainline business at Heathrow. For this reason they are not included in the proposed sale.”
It is envisaged that once the sale of the regional business of BA Connect to Flybe is completed, there will be a transition period until the start of the summer schedule on March 25, 2007 while the handover of responsibilities is undertaken.