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Goforfun
14th Jun 2001, 21:16
BA sells Go for 100m

British Airways has announced that it will sell its discount airline Go to the private equity firm 3i in a management buyout for 100m.
The British airline will receive a further 10m if 3i sells Go to someone else within five years.

The price tag is roughly in line with most analysts' expectations.

BA said that it was making an "excellent" return on its initial investment of 25m in Go three years ago.

Barbara Cassani, chief executive of Go, said: "I am delighted that the people who have made Go such a success will now co-own the airline."

A new strategy

Last year BA decided to sell Go as part of a strategy to restore profits at its loss-making European operations.

"Go is an excellent airline with a fine management and workforce," said Rod Eddington, the chief executive of BA.

"As a no-frills operator, however, it simply does not fit in our full-service strategy."

The budget airline market - dominated by Go, Ryanair and Easyjet - does not suit BA's plans to reduce lower-priced seats on many of its routes and instead focus on business class passengers.

Exclusive talks

BA entered into exclusive talks with 3i over the sale of Go back in March.

At the same time, Dutch carrier KLM, which had shown some interest in the sale, said it would not make a bid.

Ms Cassani said then that she expected to remain in charge of the no-frills carrier after the sale.

In a company statement on Thursday, Ms Cassani said: "Over three years we have built a strong business with low prices and great service."

Mr Eddington added: "I am sure that Barbara Cassani and her team will continue to grow this exciting business into the future."


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In the same week- Go also announced routes from Bristol taking on Brymon and British European on domestic routes.

BEagle
14th Jun 2001, 21:30
Apologies for my parallel thread - this one hadn't loaded when I started mine. And yes - I did cock up the decimal point, I should have said 110M!!

(Danny, I've deleted the other thread. Or rather, tried to if it's still there after I've typed this!!)

mjenkinsblackdog
15th Jun 2001, 00:34
not worth it.

Jack The Lad
15th Jun 2001, 02:51
Blackdog, 3i are always on the look out for astute financial analysts, especially with experience in the aviation industry, because, after all, they have made such a hash of it so far! You could go far with them, I think...or maybe not.

I'd stick to flying the orange bits if I were you.

skua
15th Jun 2001, 13:44
Venture capital firms (such as 3i) usually get their pound of flesh (or more) by:
1. flogging off surplus assets, and
2. cutting operating costs to the bone.

I am no expert on Go, but I would have thought that
1. it has not got many assets (eg property) that can be sold
2. it is already a lean mean machine.

The bottom line in that employees in VC owned companies line the pockets of the VC owners, and, more often than not, it is not a pleasurable process for them.

So be careful out there.

5by5
16th Jun 2001, 00:53
And be under no illusions that Go, just like all the other low cost carriers, really do get a 'pound of flesh' out of their employees, i.e. a lean, mean, machine it truly is.

E.g. we do 900 hours, which is about 510+ sectors of a year of short-haul scheduled services, based on a roster that seems to have you for weeks, or months, on either early starts or late finishes - including late finishes and early starts around days off, four sector days (sometimes five, and it'll soon to be six) all rostered to within minutes of FDP limitations, with very tight turnarounds (typically 25 to 40 minutes - time to relax ? dream on ! ), plus BYO food, to say nothing about that interminable corporate crap regarding 'Warrior Spirit' and company ethos by way of 'mission statements'.

Actually (worryingly ? ) if you were to ask the majority of Go pilots if they will still be doing what they do now in, say, seven years, they say "No way !". Indeed the vast majority of them also say this if you ask it of them for six, five, or (a fair few) even four years.

So it's not quite the happy ship that some management would have you all believe, which is shame because it used to be very good but it's gone downhill big time over the last year - and before any of the 'believers' jump down my throat, don't worry I'm off ASAP because I didn't join Go to work myself into an early grave, at any price.

That said, good luck to 'em, they'll need it !

Jack The Lad
16th Jun 2001, 02:25
Skua, you need to go and understand the difference between 'asset strippers' and VC. Poles apart, sorry mate. A little bit of knowledge is always a dangerous assumption. Go see pilots make good managers!

Jack The Lad
16th Jun 2001, 03:22
5by5

I understand your feelings...BUT, where are you gonna go? Have you found 'the airline' that will resolve your problems? If you have, please tell us all, we'll join you

5by5
16th Jun 2001, 12:19
JTL, I know where you are coming from, as in 'the grass is greener syndrome', but - and as I'm sure you are aware ;) - a lot of blokes left other airlines to join Go in order get out of night flying 'bucket and spade' charters and or working their butts off during the summer (feast) and not having a lot to do during the winter (famine). Indeed way back when, Go was billed as wanting to be seen as a 'life-style' airline, i.e. you'll be working on European scheduled services, for a company owned by BA (plus some modicum of BA interline benefits - i.e. not all), which outside of the occasional night-stop / split duty you'd be at home in your bed most nights.

To be fair it did indeed start out much like that, and the esprit de corps was hard to beat. However, imho, that is not what it is like now. See my post above....

Furthermore, the reality is that where you might have done 900 hours a year at Monarch / Air2000 / JMC the majority of this would have been on nice long two sector days, but at Go what we're now doing is 900 hours a year of multiple sectors, e.g. where a JMC pilot might have been used to London - Alicante - London, get off... the same pilot in the employ of Go is almost certain to do London - Alicante - London - Glasgow - London.
Also, and please correct me if I'm wrong, but at Go a monthly-based rolling 900 hours per annum are used, rather than a flat-rate 900 hours in a twelve month period. So at Go you can expect to be worked really hard prior to any leave and similarly so on your return, in order to max your monthly annualised total, i.e. your going flat-out all the time !
This will not change because and I quote (paraphrased from Barbara's recent memo to all staff) 'Will go be run differently now?.... 3i are very keen that we are floated on the stock exchange as soon as possible. This is likely to be within the next 3 years, although it could take longer than this. Because of this, 3i will put pressure on us to make money because the more successful we are, the earlier we can float.
So the pressure is definitely going to be on to max the flying with the very minimum of crews.

Now if you're a wannabe looking for your first jet job, or an F/O looking for a command, or Captain looking for a training job, it's an ace company as it offers really great training and opportunities - but as a long-term career, uhm ?

In closure, I must say that Babs has some cracking lines in her recent memo, e.g. 'it shows that when we all pull together everyone wins' and 'The business is doing well at the moment, and you deserve the credit' and 'you will have the chance to own shares in Go in the future, without having to pay upfront today' i.e. you've still got to buy them. Incidentally for their last three years of effort the four main directors (plus a couple of other senior managers) will share 12% of the Go sale price (Babs gets 4%). The staff are getting approx 700 each profit share - Go figure ?!

Ps. Actually JTL, and w.r.t. Have you found 'the airline' that will resolve your problems? it's been sorted, but I couldn't possibly tell all and sundry just who it is, now could I ?!

Unicom
16th Jun 2001, 13:23
As Figment once said to me..
"GO is just a job..not a career"!!!

cbavoidance
16th Jun 2001, 16:41
The reason for the GO sale was for extra cash to paint the BA aircraft tails...
Don't let any one tell you any different!

hassel
16th Jun 2001, 22:20
Chief Pilot leaves followed by the Training Manager. One can only wonder why.

mjenkinsblackdog
17th Jun 2001, 18:05
Shame go was started by barbara when is she being exported.or shacked along with Mr Ayling .
And Lad you can piss off im a 3i share holder with vested interest so crawl back into your hole.

5by5
17th Jun 2001, 19:12
Well mjenkinsblackdog, if your a 3i shareholder then I'd ask 3i some serious questions about the 'investment' that they've just bought into - looks to me like they've believed all the hype spun to them by Babs & Co - Emperors New Clothes syndrome ?!

One question you might ask is why is it that the recent planned fleet acquisitions (two more B733's) were brought forwards, in spite of there not actually being enough crews to operate them in any sensible fashion, i.e. to do it the incumbent crews have been working to the limits (and beyond, AKA. discretion) to keep the show together. Thus as it is right now we can hardly crew the aircraft, and just where we think we'll find still more - especially LHS folks - with all airlines fishing from the same bucket for crews, to cover the future planned fleet expansion, is anybodies guess. I'd doubt that they've told 3i about this potential hiccup to the grand scheme, or that many of the crews who are already here are getting seriously close to chucking in the towel - see some of the reasons above - and just where then would that leave us ?!

Somehow, imho, the generals at the very top seem to be quite dramatically out of touch with the thoughts and feelings of the troops - which is not good and a real shame because there are some really great troopers at Go.

Barbara's Pole
17th Jun 2001, 21:59
Funny how some people change their tune all of a sudden...eh, 5by5? :)

hassel
17th Jun 2001, 23:43
Read Financial Mail on Sunday
"BA slashing fares in pricing U-turn"
Looks like they have set this one up.

5by5
18th Jun 2001, 00:20
Not really BP, I just call it as I see it - that said, it took a long time until I saw through all the hype.

Jack The Lad
18th Jun 2001, 12:38
Blackdog, >...piss off > ??? Charmed, I'm sure

You're an investor in 3i? That rather begs the question then, if you don't have confidence in their investment decisions, why buy their shares in the first place??

Why not call an EGM so you can tell the experts how to do their job?

keepitlit
18th Jun 2001, 14:37
Didnt 3i have a big stake in Gill Airways
HMMMMM makes you think :) :) :)

Rdgs Keepitlit

twinjet
18th Jun 2001, 23:28
blackdog, you are a very rude man :)