From Flybe website:
News
Completion of acquisition by Flybe of BA connect.
05 March 2007
Flybe announces that it has completed the acquisition of BA Connect, the regional airline business of British Airways.
Flybe’s acquisition of BA Connect (which does not include BA Connect’s London City or Manchester / JFK routes) creates a business with over £500m in revenues and which will fly nearly 10 million passengers once the transition is complete. The airline will operate 152 routes, flying from 22 UK and 34 European airports with new routes to key European commercial centres including Paris, Düsseldorf, Frankfurt and Milan. Through the merger of these two networks, Flybe will become Europe’s largest regional airline with a network that has a unique balance between business and leisure passengers.
Flybe plans to increase its current commitment to invest $1.2bn in new aircraft to over $2Billion by increasing the fleet to over 80 Bombardier Q400 and Embraer 195 aircraft by 2010. Flybe plans to retire the BA Connect fleet of 50 seat jet aircraft as soon as possible to drive maximum fleet efficiency. Flybe will have 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 deal has been structured to ensure Flybe is protected financially during the transition period with sufficient funding to cover the inefficiencies of operating 50 seat jets and a degree of protection over future values of these aircraft until they are retired. To achieve this BA is providing Flybe with cash funding of £96m.
Additionally BA is providing Flybe with Commercial support by entering into a one way codeshare agreement on all previous BA Connect routes, allowing for a smooth consumer transition to the Flybe brand.
As part of this acquisition, British Airways will receive a 15% interest in Flybe.
The immediate priority for Flybe will be to ensure that the transition is managed effectively and once this has been achieved, it remains the Groups intention to seek an IPO at the appropriate time.
Commenting on the acquisition, Jim French, Chairman and Chief Executive of Flybe, said:
“This is a proud day for Flybe, now Europe’s largest regional airline. The acquisition of BA Connect gives us critical mass across our domestic and European city markets and, with valuable slots at congested European airports, brings our growth plans forward by two years. Flybe is now firmly established as one of the UK’s largest airlines.
“Flybe is above all a regional airline and the new routes this acquisition brings to our network reinforces our commitment to serving the whole of the UK. We are playing our part in supporting the regional economies of the UK in line with the Government’s own ambitions.
“This is fantastic news for air travellers across the UK and Europe where more consumers will now be able to benefit from Flybe’s efficient and friendly service, all at a price which provides outstanding value. Millions of BA Connect travellers will now benefit from increased service and frequency at substantially lower prices whilst flying on the most environmentally friendly aircraft available in the Regional Air Travel maket..
Flybe will employ over 3500 staff in the new combined business. We are confident the new airline will offer exciting and continued career opportunities. During the last four months Flybe has worked closely with all Unions and Staff Associations to ensure that all staff would be working on the same terms and conditions from the commencement of the new, combined business.
We are all looking forward to working together to ensure Flybe will be a success.