British Airways confirmed today that it intends to make a recommended offer for all of the issued shares in the British Regional Air Lines Group PLC (BRAL).
The recommended cash offer of 120p per share, values the entire issued share capital of the BRAL Group at £78 million.
The group - made up of British Regional Airlines (a British Airways franchise partner since 1995) and Manx Airlines - estimates pre-tax profits of not less than £10 million for the year ended December 31, 2000.
The offer will be subject to formal approval by the Office of Fair Trading.
The Board of the British Regional Air Lines Group intends unanimously to recommend shareholders to accept the offer from British Airways.
The purchase is a further step in British Airways’ previously announced plans to co-ordinate better its various shorthaul businesses and reduce fragmentation among subsidiary and franchise partners. It is also in line with the strategy to focus on profitable market sectors, operating smaller aircraft at higher frequencies with a more profitable mix of passengers.
Today’s announcement underlines British Airways’ commitment to services in the UK regions and further demonstrates the importance attached to regional customers and employees.
Acquisition of the BRAL Group will give British Airways access to an increased fleet of Embraer regional jets. The deal will deliver more efficient scheduling between BRAL’s operations and those of British Airways’ subsidiaries in the regions.
British Airways plans to combine operations of the BRAL Group with its profitable West County based subsidiary, Brymon Airways.
There are no plans to withdraw or reduce regional services as a result of the announcement. The route networks operated by BRAL, Brymon and Manx are complementary. Isle of Man services will continue to operate in Manx colours.
Rod Eddington, Chief Executive, British Airways said: “This deal is a great opportunity for us further to improve regional flying - better matching capacity to demand and more closely integrating the regional networks to give customers a better, more cohesive schedule.
“The British Regional Airlines Group is a successful business. Brymon Airways is too. Combining these regional specialists will allow us to capitalise on their strengths and ensure we remain competitive in this sector of the UK market.”
Sir Michael Bishop, Chairman of BRAL Group said: “I am extremely pleased that we have reached an agreement with British Airways which reflects the significant strengths of British Regional Air Lines Group in this demanding sector of the industry, and the value of the Group’s route network, fleet, operational reputation, and above all its professional and committed staff.”
“British Airways will provide the Group with the scale, stability and the opportunity to develop the business, and the offer represents the best way forward.”