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BA Connect to be sold to Flybe
British Airways is to sell its UK regional subsidiary BA Connect to Flybe.
The sale does not include BA Connect’s London City or Manchester to JFK routes.
BA chief executive Willie Walsh 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. BA will have a 15% 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.”
BA said once the sale 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.
Flybe plans to phase out all of the existing BA Connect fleet as soon as possible and accelerate its current fleet renewal programme.
“The current Flybe £1.2bn investment programme in Bombardier Q400 and Embraer 195 aircraft will be complete by 2009,” said a statement.
“At that time Flybe will have a fleet of 82 aircraft, which will be one of the youngest and most environmentally sensitive fleets in the world. In line with its environment policy Flybe will by then have reduced fuel consumption by over 50% per seat.”
The new BA Connect/Flybe business will generate over £600m in revenues and carry nearly 10 million passengers.
It will continue to concentrate on short haul domestic and European major city markets.
The acquisition will increase Flybe’s business traffic with new routes to key European commercial centres including Paris, Düsseldorf, Frankfurt and Milan.
Flybe has announced its strongest ever summer trading period, with operating profit of £20.5 million for the six months to September 30, compared to £12.4 million in the same period on 2005.
BA announced its financial results today for the three months to September 30. See separate story
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