Mister Geezer
4th Jul 2008, 22:40
Extract from the Telegraph:
British Airways has moved quickly to beef up its newly launched OpenSkies subsidiary with the £54m purchase of L'Avion, the Paris-based all-business class airline.
The deal, which includes £26m of net cash on L'Avion's balance sheet, will allow OpenSkies to raise its Paris Orly-New York flights to three per day, including the two to Newark airport currently operated by L'Avion. Both carriers use reconfigured Boeing 757 aircraft.
OpenSkies, which launched on June 19 with a daily service from Paris Orly to New York JFK, was set up by BA to capitalise on the new "open skies" treaty between the European Union and the US - though its move sparked a furious row with pilots union Balpa over the decision to employ non-BA crew.
OpenSkies is already using one of L'Avion's three take-off and landing slots at the constrained Paris Orly airport and the move brings BA two extra slot pairs and the French carrier's customer list. L'Avion has flown 65,000 passengers since its January 2007 launch.
Willie Walsh, BA chief executive, said L'Avion "has many synergies with OpenSkies and buying it provides OpenSkies with a larger schedule and an established customer base in the Paris-New York market".
L'Avion is the sole survivor of the four all-business class airlines launched in recent years following the collapse of Maxjet, Eos and Silverjet. Andrew Lobbenberg, an ABN Amro analyst, said: "The financial performance of all-premium airlines has been poor and, with rising fuel prices and slowing economic growth, it would be surprising if L'Avion was highly profitable. But buying them does get rid of a competitor."
Christophe Bejach, L'Avion's co-founder and chairman, admitted the business was yet to break even, but differentiated L'Avion from its failed rivals. "We have been much more careful," he said. "We have not opened up routes to close them down. We have been extremely low-cost in our approach."
L'Avion has 77 staff - around a quarter of Silverjet's, which flew only one more plane. Mr Bejach, who owns 5.5pc of the airline, and other private investors injected €25m (£20m) to launch L'Avion and have since put in more cash.
BA plans to integrate L'Avion under the OpenSkies brand. L'Avion's aircraft have 90 seats in a single-class cabin, while OpenSkies has 82 seats in three classes - though that could be cut to two when its next routes are launched.
Hardly a surprise to see this but perhaps it happened quicker than some might have thought!
British Airways has moved quickly to beef up its newly launched OpenSkies subsidiary with the £54m purchase of L'Avion, the Paris-based all-business class airline.
The deal, which includes £26m of net cash on L'Avion's balance sheet, will allow OpenSkies to raise its Paris Orly-New York flights to three per day, including the two to Newark airport currently operated by L'Avion. Both carriers use reconfigured Boeing 757 aircraft.
OpenSkies, which launched on June 19 with a daily service from Paris Orly to New York JFK, was set up by BA to capitalise on the new "open skies" treaty between the European Union and the US - though its move sparked a furious row with pilots union Balpa over the decision to employ non-BA crew.
OpenSkies is already using one of L'Avion's three take-off and landing slots at the constrained Paris Orly airport and the move brings BA two extra slot pairs and the French carrier's customer list. L'Avion has flown 65,000 passengers since its January 2007 launch.
Willie Walsh, BA chief executive, said L'Avion "has many synergies with OpenSkies and buying it provides OpenSkies with a larger schedule and an established customer base in the Paris-New York market".
L'Avion is the sole survivor of the four all-business class airlines launched in recent years following the collapse of Maxjet, Eos and Silverjet. Andrew Lobbenberg, an ABN Amro analyst, said: "The financial performance of all-premium airlines has been poor and, with rising fuel prices and slowing economic growth, it would be surprising if L'Avion was highly profitable. But buying them does get rid of a competitor."
Christophe Bejach, L'Avion's co-founder and chairman, admitted the business was yet to break even, but differentiated L'Avion from its failed rivals. "We have been much more careful," he said. "We have not opened up routes to close them down. We have been extremely low-cost in our approach."
L'Avion has 77 staff - around a quarter of Silverjet's, which flew only one more plane. Mr Bejach, who owns 5.5pc of the airline, and other private investors injected €25m (£20m) to launch L'Avion and have since put in more cash.
BA plans to integrate L'Avion under the OpenSkies brand. L'Avion's aircraft have 90 seats in a single-class cabin, while OpenSkies has 82 seats in three classes - though that could be cut to two when its next routes are launched.
Hardly a surprise to see this but perhaps it happened quicker than some might have thought!