GO NOW OWNED KY KLM?

[driver1]

Can anyone confirm the rumour that Go has been bought by KLMuk?

Strong rumour that lots of yellow paint is on order!!!!

[driver1]

From today's Telegraph:
British Airways has received four bids for Go, the budget airline it put up for sale last year. The bids - submitted on Tuesday - are each believed to be worth less than £150m.
Dutch Airline KLM is understood to be leading the auction, ahead of bids from venture capitalists 3i, a joint venture between private equity firms Electra Partners and Barclays Private Equity, and an unnamed German tour company.
However, it is not known if BA's chief executive Rod Eddington would be happy to see Go acquired by a rival airline. KLM - which already owns the Buzz budget airline - could probably pay a higher price than a financial buyer, but a trade buyer might also mean greater competition for BA.
Go's chief executive, Barbara Cassani, is likely to work with either of the two financial bidders if their bids are successful. Barclays Private Equity and Electra initially made separate bids, but have since joined up in order to facilitate the additional investment that will be necessary to turn Go into a profitable business.
When BA first announced the sale, the market speculated that the company could be worth as much as £300m. However, price expectations have since fallen to below £150m.

[G-INGER Roger]

If GO is being sold as a "GO"ing concern, surely it makes little difference who buys it? They are going to lose the budget passengers & Stansted locals anyway. Might as well take the highest offer (and some of their rivals cash) and just deal with the future competition. Refusing to sell to KLM could be seen as a decision made out of pride, not business sense.

The way to stop passenger losses would have been to fold the airline. But there is nothing to stop buzz / Ryan / Easy expanding and taking up the best routes that way either.

Only reason to choose another offer is if BA were convinced one set of bidders was markedly more incompetant and likely to mess the operation up so it folded on its own! BA gets the cash and GO dies on its own. Pretty unlikely though.

Anything obvious I have missed here?




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Just keep it Ginger!

[driver1]

KLM may use private equity to bid for Go
By Kevin Done and Lina Saigol
Published: February 23 2001 20:33GMT | Last Updated: February 25 2001 18:29GMT


KLM, the Dutch flag carrier is considering mounting a joint bid with a private equity group to take over Go, the low cost airline subsidiary of British Airways.

BA, which is being advised by Goldman Sachs, is hoping this week to select its preferred bidder for exclusive negotiations with the aim of completing next month. Among the five short-listed bidders, the two private equity groups Electra Partners and Barclays Private Equity are understood to have teamed up and submitted a joint bid.

Electra had been approached by Candover, another private equity firm, but decided to mount the bid with Barclays.

Rival offers are understood to have come from 3i, the venture capital group, and from a European-based travel and leisure group. BA is hoping to secure a deal valuing Go at about £100m ($145m) but analysts suggest bids are more likely to be in the £70m to £90m range.

Among the private equity groups, 3i has been involved in the airline sector with its highly successful investment in 1991 in CityFlyer Express, which operated as a BA franchisee and was taken over by BA for £75m in late 1999.

Barclays Private Equity holds part of two Barclays funds' controlling stake in London Luton Airport Operations, which has the 30-year operating concession for Luton airport. The airport has been involved in a long-running dispute over landing charges with EasyJet, a rival to Go in the low-cost airline sector.

KLM has reached a strategic crossroads with its involvement in the fast- growing but highly competitive low-cost sector.

It started its own low-cost operation, Buzz, at the beginning of last year competing with Go and Ryanair at Stansted airport. It is understood KLM has concluded that Buzz, which is still lossmaking, is too small, however, to compete with bigger rivals.

It is considering increasing its involvement in the sector by taking over Go to combine it with its Buzz operation to achieve the necessary size.

The alternative is to follow BA's example by abandoning its low-cost experiment and trying to find a buyer for Buzz or another way of using its assets.

In contrast to BA's experience with Go, which ended up cannibalising part of BA's mainline traffic, KLM has avoided competing with itself through Buzz. The two brands have been kept further apart.

Copyright FT.COM

[Heavy Landing]

Heard the same rumour at the end of last week. Apparently, GO 737's to be absorbed in Buzz, and Buzz 146's revert to KLMuk.

Makes sense as a quick and easy way for Buzz to acheive their much desired and planned expansion.

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I'm flaring ! I'm flaring!

[paperpusher]

Heard this one too, although I am given to understand it will stay as GO as it now has a saleable image,and unlike Buzz is heading for a profit albeit small. the question would be things like pilot Seniority,Office,Ops and telesales, are they really needed as well or will KLMUK run the show and make the others redundant.
It ain't over until the Fat Lady Sings

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Never attribute to malice that which can be explained by stupidity.

[Flyin' High]

Has anyone considered the prospect that if BA was to sell GO to KLM, it would then find itself in the position of owning the company again in a few years when the BA/KLM merger finally goes ahead. (might be a few years but is still a realistic possibility)

The flip-side of the argument is that the lease on the Buzz 146's is almost up and it would make sense for Buzz to acquire more cost effective a/c than the expensive 146's.

FH

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Speak your mind - It proves you have one! :)

[Ray D'Avecta]

If KLM did buy GO, and the subsequent "Buzz/GO merger" Airline was proving to be an obstacle to a future merger of KLM/BA, its quite possible that BA would make KLM divest itself of the Low Cost Carrier as a pre-condition of the merger. So, no major worries there....



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"Airspeed is life.....Altitude is life insurance!"

[The Guvnor]

Some weeks back in one of his usual attacks on the competition, Ryanair's CEO, Michael O'Leary, questioned why - if Go was as good a deal as was being made out by BA - its Chief Executive, Barbara Cassani was not mounting a management buyout.

Why not, indeed?

[This message has been edited by The Guvnor (edited 04 March 2001).]

[This message has been edited by The Guvnor (edited 04 March 2001).]

[paperpusher]

Guvnor, and who is to say that she is not going to go on the buyout route?

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Never attribute to malice that which can be explained by stupidity.

[BEagle]

Why on earth would an airline being flogged off expect to have its name transferred to an airline which is doing fine? if buzz absorbs Go as a result of an acquisition by KLMUK, either a totally new name should be used, or the airline should continue to be called buzz.

Hope the 146s stay for a while though!!

[JB007]

Surely if KLM buy GO it will only be good for one party...i.e KLM!

Hope it works out for everyone.

Cheers
007



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Hear All...See All...Say Now't.

[email protected]
(I'm away for a while!)

[ADC]

Guvnor,

When will you learn to keep your big mouth shut!

Barbara Cassani is an employee of BA, as Chief Executive of GO. Any talk of a management buyout would be a conflict of interest, unless it was done with BA's permission.

On the one hand her employers are expecting her and her board of directors to be out there talking GO up to prospective buyers. How then can she be talking to BA about a management buyout.

So, do us all a favour. Get your airline up and running successfully, THEN come on here and talk intelligently about the airline business. Otherwise just shut the F**k up.

[The Guvnor]

ADC you are (as usual) showing your lack of commercial/corporate knowledge. Not only is there nothing whatsoever preventing BC from doing a management buyout; it was being positively encouraged by the bods at the top of Waterside.

Conflict of interest indeed!! :rolleyes: :rolleyes:

[autobrakemedium]

Guvnor,

I normaly have a lot of respect for what you say but I have to disagree with you on this one.

BC does have a conflict of interest here, on the one hand she has to try and get the best price for her epmloyers, on the other if she does a buyout she will want the cheapest price.

She is in a very tricky situation but she is a shrewd cookie and will no doubt have a way round it.

[The Guvnor]

autobrakemedium - take it from me, the head honchos at Waterside were pushing her to do an MBO - to the extent that they were even prepared to stump up (limited) guarantees!!

You'll recall early on that she was in fact the front runner - but at the end of the day I understand that she felt that it wasn't worth it and will therefore probably be returning to BA in the event of a sale.

It also looks as if BA's 'internal' sale of Go to the Bland Group (owners of GB Airways) has fallen through ... could it possibly be that Go may yet turn out to be another Millenium Dome?

[ADC]

"Take it from you" !!!!

Why on earth should we? It is YOUR lack of commercial/corporate knowledge which is obvious to everyone ( So what IS happening to Caledonian Wings then).

All the talk of a management buyout of GO is a great way to get the company devalued. Imagine bidding for a company where you knew in advance that the Board were openly competing against you for ownership. I don't think you would feel you could win their support for your proposals eh? Or that you could count on their support if you won the bid.

Now, I wouldn't be surprised if one or both of the Capital Investment groups were planning to bring the GO board in as part of their bid, if they are invited by BA to be in the final two. That would make sense. In the same way that KLM are probably talking (or being talked to) by the same people to join their bid, if they get through.

But if BC was out in the marketplace openly drumming up support to buy GO at the lowest possible price, it would be the same thing as insider trading and would land her in serious trouble with the board of BA

[This message has been edited by ADC (edited 27 February 2001).]

[Desk Driver]

ABM = Are you saying that every Management Buy Out there has ever been has been a conflict of interest?? Surely BC is not handling this sale on her own, if at all.
I would think that a sale like this would be handled from the top of BA itself.


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You fly em we'll fill em!

[autobrakemedium]

No I am not, but most MBO's are done so outright, not 'in competition' to a conventional sale.

I know for a fact that Babs has a lot to do with the sale of Go.

I think that ADC & Guvnor have other issues going on here!

[This message has been edited by autobrakemedium (edited 27 February 2001).]

[The Guvnor]

ADC - as usual, you're showing what a complete pratt you are. A management buyout (MBO) is done by a company'smanagement hence the name (which should have been an easy giveaway even for someone like you! :) ) and is an extremely common way for a large company to divest itself of an unwanted subsidiary.

Investors, by and large, invest in management teams - you can have the best business idea in the world, but if you haven't got the right team, it will be a seriously uphill struggle to finance it. I therefore think that your little scenario that BC would sabotage a deal if she didn't get her own way with an MBO doesn't hold water.

I have it on very good authority that an MBO was mooted and discussed with several financiers - and as I previously said, BA were prepared to give limited guarantees as part of the package if BC took it over (but not anyone else).

She was therefore in the role of 'preferred bidder' (kind of like the Millenium Dome) but having taken a long, hard look at things she's no longer in the running (again, kind of like the Millenium Dome).

Now, if the company's senior management don't have sufficient faith in things to pull together an MBO (and bear in mind that originally the price being talked about was around £300 million - it's now hovering around the £100 - 150m mark, depending on who one talks to) - then why should an investor think they can do better ... unless of course they have a better management team to put in place?

The villain of the piece - if indeed there is one - is Stelios who took the market something rotten with his flotation. As a result, they really are not interested in low cost airlines (except FR) - the old adage of "once bitten, twice shy" applies.

My perception is that this probably wouldn't apply in the case of institutional investors (unless they b(r)ought a team in) - and nothing I have seen from Buzz/Air UK gives me any faith in their existing people being any better than BC and her existing team.

BC is a very tough cookie - she was heavily involved with Operation Covent Garden - and her hubby is well connected in the City. If she really thought she could make a go of things (excuse the pun! :) )I have no doubts whatsoever that she could have pulled it off to the satisfaction of all concerned.

Add to that the lack if interest from Bland (the latest 'preferred bidders') and I think that BA have their very own Millenium Lemon on their hands.

[Hamrah]

Guvnor,

Having enjoyed a FORMAL briefing from the powers that be in both BA and GO, I have to tell you that you are very very wide of the mark, and that your Good authority is no more than the standard City rumour Network.

I wonder if that works, a Capitalists RUmour NeTwork..or CRUNT....

ADC, as I pointed out before, I'm sure you can make your points without resorting to abuse.

Cheers,

H

[rubik101]

How about this!
Go becomes part of KLM. KLM decide that two low cost airlines based at STN 's one too many. KLM move BUZZ to mainland Europe, GO stays at STN and carries on as before. No-one notices the difference!! QED..
Best rearguards, Rubik 101

[The Guvnor]

Hamrah, how long ago was the briefing? The information I have came from someone senior at Waterside within the last week ...

In any case, the primary purpose of the last post was to show that (a) MBOs are commonplace; and (b) they are not a conflict of interest.

I have no axe to grind on this issue - having met a number of the senior Go types (including yourself) thay all seem a nice (and competent) enough bunch of people and I do wish you all well.

Perhaps you could fill us in on the real situation?

[Hamrah]

Guvnor,

I am sure you are aware that I am unable to discuss these briefings in Public for legal reasons, something that was made very clear to us by the Lawyers.


H

[This message has been edited by Hamrah (edited 28 February 2001).]

[This message has been edited by Hamrah (edited 04 March 2001).]

[The Guvnor]

Deleted by TG

[This message has been edited by The Guvnor (edited 04 March 2001).]

[paperpusher]

H, watch yr blood pressure :)

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Never attribute to malice that which can be explained by stupidity.

[twistedenginestarter]

Can anyone explain why professionals with good S&P ratings like KLM and BA can't make any money at the low end yet Ryan and Easy can?

What's the secret?

(Or is it a secret...)

[dogs_bollx]

Hamrah

The thing that beats me is that why do you get so worked up whenever someone takes only the slightest pop at Go? What is your interest anyway since you are now the ex Chief Pilot?

[dogs_bollx]

Hamrah,

I could not agree with you less. In the main you pop up over most Go related threads in one guise or another often taking a very defensive stance. This is fair enough but my question still stands, as you are no longer the CP why bother? Surely you now have bigger fish to fry?

[Devils Advocate]

Dogs, if you don't understand why H, who having spent the last three years of his life helping to bring Go Fly from zero B737-300's to 14 (and number 15 is about to be delivered), zero flight-crew to over 150, zero cabin crew to over 250, zero manuals to fully JAA approved, zero training to one of the best training/trained airlines in the business, etc, etc, etc., can't be free to comment on this in here, then it speaks volumes about you.

The fact is that H most certainly knows more about what's going on at Go than the Guvnor, who inspite of his posturing, ever will !

Now could somebody please remind me again of the date the Guvnor said that his airline would commence operations. See: Caledonian Wings is for real!! (http://www.pprune.org/ubb/NonCGI/Forum1/HTML/010916.html) and just how much the Guvnor has accomplished during the same three year period ?!

Q). Anybody up at PIK seen a fleet of L1011's on the ramp, and sporting the livery of 'Caledonian Wings' ? No, I thought not !

[InFinRetirement]

Well said DA. And DB, Hamrah has to work a three month contract out, and handing over the complex job of CP cannot be done in a day a week or a month. But perhaps you don't know anything about the work of a Chief Pilot.

Anyway, you have to know the real man before you can make any comment. Or didn't you realise that? I'll guarantee if you did, you would have kept your mouth fully closed.

[The Guvnor]

Devils Advocate - So the start date has been moved back by a year - so what? So has that of Blue Fox and Newlines. A great deal of work has gone into the project and anyone who has ever set up an airline will tell you what can go wrong, will go wrong!

When you've done it, you can scoff...

[mutt]

Dogs_bollx

I'm guessing that it has something to do with a little thing called PRIDE

Mutt.

[Devils Advocate]

Touch a nerve did I Guvnor ? Oh good !

Ok everybody, hands off the Guv till 1st April 2002 - a date when we'll all be able to come back in here and pilliory him again.

Ps. I'm still laughing......

[tilii]

Beware all. Methinks Mutt and The guvnor are either one and the same or are closely linked (perhaps incestuously).

Just to toss in my sixpenneth, Hamrah has every reason to be PROUD of what he achieved at GO and every right to defend it against scurrilous attack from the likes of the pathetically under-achieving Guvnor. Furthermore, H will go on and repeat the exercise, and God knows his destination company desperately needs skilled managers of profound integrity.

[The Guvnor]

I hear whispers that following the dumping of KLM at the altar by Alitalia in favour of Air France, talks between BA and KLM regarding a merger may well be back on again.

Just think - if KLM really did buy Go, then BA would shortly have to go through this whole exercise all over again! :) :) :)

Tilii - kindly stop hijacking threads to try and snipe at people you don't agree with. And I hope you're not insinuating that there is anything wrong with British World - what happened, didn't they even acknowledge your application? :)

[InFinRetirement]

tilli, you can think all you want about mutt and The Guvnor, I know both and you are million miles out. Hope your nav is better.

[Devils Advocate]

Dear oh dear Guv, you admonish somebody for 'sniping' and then literally in the next sentence you snipe straight back at them; Now talk about the pot calling the kettle black !

[tilii]

Guvnor

Yes, I am so insinuating. And I sincerely hope H can make a contribution to correcting what is wrong with it.

[mutt]

Tilli,

What did I do to rattle your cage?

My message was not intended to insult or even be derogatory, it was to answer the question of "Why bother" asked by dogs_bollx.

Devils Advocate clearly explained the reasons why Hamrah has the right to be extremely proud, he has achieved something that most of us can only dream of.

Hamrah if you read my message as an insult, I apologize profusely.

Good Night.

Mutt.

(IFR thanks for the vote of confidence.) :)

[JB007]

SO,

IS GO OWNED BY KLM THEN ?



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Hear All...See All...Say Now't.

[email protected]
(I'm away for a while!)

[The Guvnor]

JB007 - who's this "Go" and "KLM", then that you're on about? :) :) :)

I thought it was a bunfight! :rolleyes:

Seriously ... the answer appears to be no, we don't think so but keep reading the Sunday Times!

[StressFree]

Mutt,
I've read through this whole thread and honestly cannot find anything that you have said that could be considered insulting. Its just the usual windbags talking the same old sh*t, trying to make trouble where it dosnt exist.

:)

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'Keep the Stress Down'

[driver1]

GUYS!! GUYS!! can we please get back to the subject and stop the personal snipes!!

I for one as a KLMuk employee am quite worried about this possible takeover of Go.

We at KLMuk and our fellow pilots at Go need to work together in protecting our future.

[Devils Advocate]

Indeed (and almost as the Guv says), the actuality of it is that it's the press that have hyped the sale of Go, e.g. it was they (the press) not BA who gave out valuations on the company (which depending upon which paper's you read is anything from £300M to 2s6d ). Likewise, and imho, it is the press that are driving the rumours w.r.t. who is in the running as the future proprietor.

That said, my (reliable) sources tell me that a final announcement is still some weeks away, so watch this space....

[standbyils]

Four pages of rubbish...where do you find the time?

I'm interested about the future of GO. Can we please offer some info as this thread promises?



[This message has been edited by standbyils (edited 03 March 2001).]

[Devils Advocate]

Duh, well what should we say, e.g. that Go has been brought by KLM, or Lufthansa, or even Fred Karno's army ?

Perhaps the reality is that nobody, or certainly very few know (or are willing to reveal) the answer to this question, just yet - and no amount of press speculation or hype will reveal any more than what comes from the final announcement from both BA and the purchaser(s)

Nb. The plural ending on the last word has been used intentionally ! ;)

[driver1]

well said STANDBYILS!!!!! :)

[G-BPEC]

What will happen if nobody ever wants Go? Will BA keep it or will a management buyout be inevitable?

[tilii]

Dear Mutt

I am most awfully sorry. I read your post with respect to Hamrah as meaning PRIDE as often used in the derogatory sense. I guess I saw red at the way The Guvnor had a go at H, whom I hold in the highest regard.

It is now clear that I was wrong and I therefore withdraw what I wrote and proffer my most profound and sincere apologies to you.

[Flypuppy]

According to BBC Radio this morning KLM have officially made an offer for GO, but the offer is understood to be below the GBP100 million that BA were hoping for.

[The Guvnor]

Tilii - nowhere have I 'had a go' at Hamrah. Could it be that here - as on another thread - you are trying to stir things and cause conflict? If so, don't bother! :)

[newswatcher]

According to Reuters reports this morning, KLM are denying the FT report that they have made an offer for Go!

[Wig Wag]

Here is the latest from the FT 5 March:

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT342YL7XJC&live=true&useoverridetemplate=IXLZHNNP94C

Not sure I would want to be owned by KLM after the carve up at Air UK. However history never quite repeats itself in the same way so lets wait with bated breath!

[tilii]

The Guvnor

Your (now deleted) post on page 2 of this thread was a direct and unequivocal inference that Go Fly was a, quote, "sh*te" airline. You quoted O'Leary of Ryanair as having said this, and went on to endorse his comment. Hamrah was Go's CP for many a long year and was very quick to take offence at this insult, as evidenced by his own reaction to your words.

How, then, do you say you have never had a go at Hamrah? Perhaps you rely on your removal of the offending post, but you should bear in mind that some of us read it and stored it.

In my book, to imply that Go is a sh*te airline equals to 'have a go' at Hamrah.


[This message has been edited by tilii (edited 05 March 2001).]

[The Guvnor]

Tilii, the more you post the more convinced I am you are a spotty faced teenage wind-up merchant. Not only don't you have the faintest idea of the implications (or costs) of training and bonding, but now you claim that comments by the CEO of Ryanair equate to me "having a go at Hamrah"!

FYI, Hamrah and I have discussed this matter in a quiet, civilised manner privately and there is most certainly no animosity between us - so stop trying to stir it.

[parkfell]

BA delay decision on GO and waits for KLM according to the Times 6/3/01.

KLM is unlikely to decide until the end of the month.

Four other companies also expressing an interest.

[tilii]

Good grief, Guvnor. I just noticed the number of your posts. You really do run off at the mouth, don't you. Like I said once before, why don't you pay more attention to your lofty ambitions and a lot less time spouting your verbal diarrhea on these pages? Spotty faced teenage wind-up merchant indeed. Harumph!

[Rocket Ron]

What was the subject of this topic? Ah yes, I remember.....GO NOW OWNED BY KLM?

Tilii and Guvnor - may I suggest you continue your sniping at each other elsewhere - we're getting bored with it now.

[newswatcher]

From today's UK FT:

"Leo van Wijk, chief executive of KLM, the Dutch national airline, said on Tuesday that the group had submitted a conditional offer to take over Go, British Airways' low cost subsidiary.

The offer was "conditional and contingent on BA accepting certain elements," said Mr van Wijk. "If it is acceptable we can firm it up. We want to have their reaction, then we can call it a final bid."

KLM had made the conditional offer jointly with a private equity group, he said.

The terms that are still to be agreed include the treatment of the leases on 13 of the 15 aircraft in the current Go fleet, which are presently guaranteed by BA, said Mr van Wijk.

KLM was aiming to merge Go with Buzz, its own low cost subsidiary, which also operates from London Stansted airport. "We would bring in our Buzz investment and know how to manage the group. There are enough management resources without Go," said Mr van Wijk.

It is understood that the negotiations between KLM and BA are focusing importantly on the future management structure of a merged low cost operation.

Ms Cassani has made clear that she is interested in remaining as chief executive of an independent Go and has said that she was prepared to work with the private equity groups, which showed an early interest in taking over the airline.

It is understood that the main rival offer that BA is still considering is from 3i, the venture capital and private equity group, which has previously been involved in the airline sector with its highly successful investment in the 1990s in CityFlyer Express, which was taken over by BA in late 1999.

BA has narrowed the field of preferred bidders as the sale of Go enters the final stage and last week rejected another offer made jointly by two private equity groups, Electra Partners and Barclays Private Equity.

KLM is the only established airline to have shown a sustained interest in taking over Go. It is conducting a strategic review of its future involvement in the low cost sector, and has made clear that it could choose to close or sell off its loss-making Buzz operation, if it is unable to gain the necessary scale through a merger with Go.

"Getting out is one option," said Mr van Wijk, "it is a market where only a limited number of players can survive."

[Copenhagen]

Bye Bye Barbara... its back to BA you go...

And what happens to the rest of the office staff? And all those overpaid directors?

Does anyone know what the morale in the office is like now... I presume its pretty bad! At least the pilots are still needed! Have many jumped ship yet?

How many came from KLMuk in the first place? Do they want to go back?

[GOLLUM]

http://www.pprune.org/ubb/NonCGI/tongue.gif
Yo copenhagen morale is good, don't worry be happy, Go will still be next year, its the Buzz people who had better start to think
what happens to their seniority when Buzz becomes GO. Remember Go are making a PROFIT
are BUZZ? http://www.pprune.org/ubb/NonCGI/tongue.gif

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Not all those who wander are lost;

[Flap40]

Gollum, That's an easy one! Buzz doesn't have a seniority list because it doesn't have any pilots. They are all employed by KLMuk.

[Tower]

Now Now gentlemen!

[Minimas]

Gollum Don’t forget that Go didn’t make profits in its first few years of operations. Are Go in profit now ?

Flap40 you are correct that the Crew and most if not all the Ground staff are employed by KLMuk. As there is very little direct competition between the two airlines, ( Only two routes I Believe ) It is most likely things will just carry on the same with a gradual merge of the two Airlines. As to the eventual name is any ones guess, but as Buzz was thought up by KLM I personally would bet on that. As far as seniority is concerned, that’s easy. If Go and KLMuk do combine, Go chaps end up at the bottom of our seniority list. After all KLMuk have a very strict Last In First Out agreement. Keep Smiling and be happy.

[Wig Wag]

It'll be good fun merging Buzz and Go if the takeover goes ahead . . .

How would the KLM UK resolve the two salary scales?

[The Guvnor]

It's usual for companies that are doing the taking over to put the incoming people on their pay scales if they are lower, rather than increasing costs. What's the differential between KLM UK and Go?

[Herod]

Don't you know the answer to that one? By the way, the future's yellow

[Wig Wag]

Go pay more than KLM UK quite a bit more.

Its a pilots market right now. Unless, that is, KLM were to merge the two airlines and reduce the overall size in line with business predictions.

Lets suppose that the takover happens and they decide to reduce capacity. KLM can establish their required crewing levels whilst making the bottom of the seniority list redundant. This reduces the leverage of the Go pilots who wouldn't want to join KLM on their [lower] pay scales.

KLM proved adept at imposing new working conditions on Air UK.

Its a simple tactic - We'll close the airline down if we don't get our way.

I am being devils advocate here I hasten to add. Speculation based on years in the industry.

If I was in Go I would hope for a management buyout backed by 3iii.

[Lord Fulmer]

Seems a little ironic that BA, as far as we know, have not yet sold "GO" , and yet they are out shopping and buy another airline to replace one that they already own!
OK.... . I know British Regional is a
different beast but whats that phrase ,
..." money burning a hole in one's pocket
"

[GOLLUM]

Ok lets look at all the points here
Minimas Go are heading for and are on target to make a Profit at the end of this year
I am not knocking Buzz here but the Go brand is stronger in the publics mind than Buzz (imho)the Boss man at KLM has stated that without the buyout/merger with Go Buzz may be folded (FT yesterday) if KLM do not aquire Go Go will not fold.
With Pay scales I am not in a position to comment but I can see it being a minefield.
WigWag i think the reason the Go have made a profit this year is pushing ahead with the route growth what would be the point in reducing it now.another point you make about tactics.any old AirUk people out there will remember the way it used to be "one happy family all working together" destroyed by the an atmosphere of fear, that family atmosphere that used to be in AirUk is now present in GO and I think all the ex KLMUK people who now work for GO would agree.
If Buzz and Go dont merge I am confident that Go will continue to grow i can only hope the same for BUZZ..Be happy don't worry

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Not all those who wander are lost;

[Tower]

Good times are on the horizon at Go meathinks.

[driver1]

Interesting times ahead i think, the Go pilots have a larger basic salary but lack other benefits such as final salary pension, £100,000 loss of license, free car parking, private health care etc. Perhaps if the two companies were to merge the two pilot workforces should ask for Go salary scales with KLM benefits?

There is however another rumor spreading around that it is the intention to merge just Buzz and Go together, the KLMuk side is to merged with KLM cityhopper. In other words the final break up and disposal of what was the old Air uk.

edited for bad spelling!!! :)

[This message has been edited by driver1 (edited 10 March 2001).]

[mfds]

Cityhopper pilots have 'rights' to KLM mainline (after 4 years service), and notional KLM seniority.

I would say the Dutch pilots union, the VNV would be very anti such a merger.
Plus KLMuk is very cheap for KLM, the Dutch employment laws make it very expensive to employ Dutch pilots.

On the surface it makes total sense, same aircraft types, both feed AMS etc, interesting times ahead !

[Wig Wag]

The latest from the FT at:

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT31UUBC4KC&live=true&tagid=IXLC078IH7C&Collid=Any

Interesting to note that the management team is values by KLM and may be retained. Bodes well for a merger perhaps?

[driver1]

Very interesting article wig wag!

Interesting that Babs says she is keen to work with the new owner and klm say that they admire the existing team at Go, sounds like the deal is done to me!! I have heard that Babs has been seen at the KLmuk hq (bendover house) alot recently!! http://www.pprune.org/ubb/NonCGI/tongue.gif

[Wig Wag]

It would seem to bode well for Go at this time.

If KLM gets out of the low cost market Go would stand better as a (just) profitable airline with reduced competition and backed by 3i who now what they are doing. If KLM buys Go then that is because they view taking market share in low cost airline tickets as profitable. There is certainly a lot of capacity to take up in the low cost market.

What is encouraging, and I speak as a pilot, is that Go's management have stood out as a valuable asset. Companies these days (in any sector) just cannot afford weak management practices.

A big plus is Stansted which must be a better airport for a low cost airline than Luton.

I'll take view here that Go will eventually be a strong player. Perhaps Buzz will be merged into Go trading on a stronger brand.

What I do hope for is that the pilots get merged properly. I.E on good deals with amicable relationships.

[buzz driver]

Hmmm...., people seem to have short memories - a recent quote (earlier on in this thread) from the CEO of KLM, seemed to suggest that they would not be requiring GO's management - now they say they will retain it !

"We would bring in our Buzz investment and know how to manage the group. There are enough management resources without Go," said Mr van Wijk.

[This message has been edited by buzz driver (edited 10 March 2001).]

[Flightrider]

A few comments as a bystander to the grand debate.

I'm led to believe that BA is not negotiating directly with KLM re Go. What I have a sneaking feeling is going on is this. 3i are negotiating with both BA for Go and with KLM about Buzz with a view to buying both, amalgamating the businesses under 3i ownership and then seeking a stock market flotation for it in due course.

This would allow the businesses to take out any duplication of their route networks; achieve some economies of scale in admin, advertising and operations and have a much stronger route network, thereby improving the presence of whichever brand they choose to retain. It does make some sense.

As to the management debate, personally, I do think some actions by Go's management in the initial phase of the company's operations contributed heavily to the losses in the first two years. These were primarily of a commercial nature (poor route selection, low aircraft utilisation, extensive & costly nightstops away from base) but these have, by and large, been corrected. Whether those mistakes could have been avoided in the first place is another issue. Buzz have, at least, managed to avoid those errors and I think some credit is due to its management for that alone.

[LTN man]

Quote from Wig Wag "A big plus is Stansted which must be a better airport for a low cost airline than Luton"

Can't really agree with that statement. For a true low cost airline a big consideration must me the turnaround time. Faster turnarounds mean more rotations. The problem for Stansted is that it is a victim of its own success with long queues for takeoff and landings at peak periods. This is one reason why easyjet will always remain at Luton despite their constant winging. Luton also has a far bigger catchment area that extends up into the Midlands. Have you every tried to get from Coventry or Birmingham to Stansted.

[S'not Possible]

Interesting times....here's my 2p worth.

Go have a strong brand name and, by all accts, are a well run,happy outfit...and now making a profit...good operation..why spoil it?

IMHO Buzz, on the other hand, have the wrong a/c (146s)for their routes- (they only have 2 737s), less flexible crewing agreements, and are not run with the same flair or dedication in Management, Ops or Eng areas.

A Go management buy out or 3i team buy out would be wasting money buying Buzz. They would do better to buy Go and.... then let the natural course of events take care of Buzz....many of the good Buzz people (and there are lots of them..) would naturally join Go anyway.

[The Guvnor]

Just a thought - wasn't it 3i that owned a large stake in BCal - and forced the merger with BA rather than SAS as Adam Thompson and his team wanted? I recall they made a few hundred million out of a comparatively small original investment ...

[This message has been edited by The Guvnor (edited 11 March 2001).]

[JB007]

3i were also the main backing behind Excalibur Airways before selling to Globespan.



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Hear All...See All...Say Now't.

[email protected]
(I'm away for a while!)

[LNAV]

LTNMAN,

Try A14/M11 1 hour 30 mins from Coventry!

About 30 mins more than LTN!

[Herod]

I think it needs stating again, since it gets lost in the arguments, Buzz is not a company. It is a brand name, the crews are employed by KLMuk, and the aircraft clearly state on the side "operated by KLMuk". Any deal would involve all the KLMuk crews, since the pilots have a seniority list, and a "last in - first out" redundancy agreement.
Makes both selling it off or closing it down an interesting exercise.

[This message has been edited by Herod (edited 11 March 2001).]

[This message has been edited by Herod (edited 11 March 2001).]

[Lord Fulmer]

Don't know if it is good news or what, but here's the latest from the FT about the GO saga.

COMPANIES & FINANCE UK: KLM snubbed as BA holds Go talks with 3i TRANSPORT UK VENTURE CAPITAL GROUP BELIEVED TO HAVE BID Pounds 100M FOR LOW COST CARRIER:
Financial Times; Mar 14, 2001
By KATHARINE CAMPBELL and KEVIN DONE


British Airways has entered into exclusive negotiations with 3i, the UK venture capital and private equity group, for the sale of Go, its low cost subsidiary.

It is understood that the bid from 3i values Go at around Pounds 100m.

3i has previously been involved in the airline sector with its highly successful investment in 1991 in CityFlyer Express, which operated as a BA franchisee and was taken over by BA for Pounds 75m in late 1999.

BA's decision to grant exclusivity to 3i is a blow to KLM, the Dutch national airline, which submitted a conditional offer two weeks ago aimed at merging Go with Buzz, its own low cost subsidiary. A BA deal with 3i would raise questions over the future of Buzz, which operates from London Stansted airport in direct competition with Go and Ryanair.

KLM has been reviewing its engagement in the highly competitive but fast growing low cost sector in the face of continuing losses at Buzz. It said recently that it could well be forced to pull out of the business if it failed in its bid to merge the operation with Go. KLM believes Buzz is too small to achieve the scale needed to compete with the likes of Ryanair and EasyJet, the leading low cost carriers in Europe, through organic growth.

Buzz, which started flying 15 months ago, has a fleet of 10 aircraft and a network of 18 destinations in its summer schedule.

Separately KLM launched another low cost experiment in December with the start of Basiq Air, a no-frills service offered by Transavia, its charter airline subsidiary, on a small number of routes out of Amsterdam.

KLM's approach to BA was made jointly with Carlyle group, the US private equity firm, which was seeking to add a stake in Go to the growing portfolio of its European fund. The negotiations with KLM and Carlyle foundered partly on the valuation of Go, but also on BA concerns about the complexity of the KLM proposals.

BA is seeking to complete the sale of Go by the end of this month as part of its efforts to reorganise its fragmented and loss-making shorthaul operations in Europe.

It is understood that BA feared that KLM's proposed merger of Go and Buzz could run into problems with the competition authorities. The deal could also have faced the issue of foreign control and ownership depending on the size of Carlyle's stake. Under European Union regulations non-EU entities are not allowed to own more than 49 per cent of an EU airline.

The Dutch flag carrier was the only airline remaining on the shortlist of potential buyers for Go, which BA put up for sale last November.

BA is being advised by Goldman Sachs.

Copyright: The Financial Times Limited

[Copenhagen]

Good news for the Go office Staff

Welcome Back Barbara!

[newswatcher]

Lord F, interesting that KLM should push out this statement this morning!

"Dutch airline KLM said on Wednesday that it has decided not to submit a formal bid for U.K. low-cost airline Go, a unit of British Airways. KLM spokesman Bart Koster said that KLM had presented BA with a non-conditional proposal but said that BA had rejected this. Koster also said there were regulatory issues that would have obstructed a deal. KLM would have merged Go with Buzz, its own low-cost airline that also operates from London's Stansted airport. Koster declined to say how much KLM was willing to pay for Go. He said KLM still is reviewing its own position in the low-cost carrier segment. "All options are still open, except for one," Koster said. In Amsterdam, KLM shares were down 2.9 percent at €24.75."


[This message has been edited by newswatcher (edited 14 March 2001).]

[Desk Driver]

British Airways says the process for the disposal of its low-cost airline Go remains firmly on track despite the decision of KLM Royal Dutch Airlines not to pursue a bid.

KLM spokesman Bart Koster had earlier revealed that the airline had submitted a non-binding offer, but BA had considered it insufficient.

Koster said KLM had not wished to raise the bid, but declined to say how much it had been worth. He also said the Dutch carrier had been concerned about regulatory complications, especially in terms of competition.

Despite the departure of the bidder regarded by sector analysts to be the favourite to land Go, a BA spokesman says: "We expect to conclude the sale by the end of this month or thereabouts.

"We're not saying how many people we are still talking with or who they are, but the process is right on track."

Analysts do not expect Go to be sold for much more than £100 million. Shortly after news of KLM's decision not to bid became public, shares in BA were down 5¾p at 333¼p.

Koster says KLM has not yet decided on the future of its own low-budget airline Buzz.

Following remarks last month by KLM chief financial officer Rob Abrahamsen that the airline was not ruling out the sale of Buzz if a bid for Go were to fail, Koster says KLM is still keeping its options open.

"We will now intensify our study into our future in the low-budget market," Koster says, adding it is still "business as usual for Buzz".


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You fly em we'll fill em!

[ex cabin crew]

I am through to the final selection to join KLMuk as cabin crew (operating Buzz flights) - I am starting to wonder if joining them would be a very good idea as the future of Buzz sounds a little uncertain. Any advice??

[outofsynch]

Interesting to read today that BA have given'exclusivity' to the 3i consortium to negotiate the sale. That seems to exclude all other bidders so the KLM rumour is definitely dead!!! The article also claims that BC is part of the 3i bid, so that scuppers the knocker who claimed she has no faith in the outfit. Watch out O'Leary!

[The Guvnor]

Hmmm... weren't various of Tone;s mates given 'exclusivity' to negotiate deals on the Dome? Look what happened with them!

Still, at least 3i is a kosher operation ... but as with all VenCap companies, it's a long drawn out process and they have a habit of dumping all but a very, very few deals...

It's not over until BC sings! (and no, I'm not in any way suggesting that she's fat!)

[gyrohead]

This should set the record straight....

KLM pulls out of the running for Go
Maria Wagland, London (14Mar01, 15:21 GMT, 301 words)


Netherlands carrier KLM has pulled out of the running to buy British Airways’ (BA) low-cost subsidiary Go, which it had been considering acquiring and merging with its own low-cost subsidiary Buzz.

KLM had previously confirmed it was considering all its options regarding its own low cost ambitions and that these included evaluating a bid for Go. However the carrier has been denying speculation that it had made a firm offer for Go and a spokesman for the Dutch carrier now says: “We have decided that we do not want to put a final offer in for Go at this moment.”

He cites regulatory problems as a factor for the airline not moving ahead with its interest, arguing that the transaction had “complexities” to do with “regulatory rules and authorities”.

BA, which put its low-cost subsidiary on the market last November, would not comment on how many potential bidders remain in the process, but KLM was believed to have been the only airline still showing an interest. A BA spokeswoman says that the airline has been planning from to find a buyer for Go before the end of the financial year and hopes to keep the sale on track. “We are in the middle of the sale process and hope to have it completed by the end of the month.”

Meanwhile KLM says it is business as usual for its own low-cost subsidiary Buzz, but that it is continuing to evaluate all its options for the carrier. “Buzz will continue to operate as a respectable low-cost carrier from the much sought after base at London Stansted. We are reviewing all options for KLM to continue its low-cost group,” says a spokesman, noting it has a range of options, from trying to find another partner to withdrawing altogether from the low cost sector.


Source: Air Transport Intelligence news

[Minimas]

You Guys at GO have had a very lucky escape. Got any Jobs going :-)

[Wig Wag]

So it's all down to 3iii.

Daily Telegraph 15 March:

http://www.telegraph.co.uk/et?ac=000155773445836&rtmo=3SHKwu8M&atmo=tttttttd&pg=/et/01/3/15/cnii15.html

[Tower]

Oh I see, now KLM have supposedly pulled out and Buzz may now be going down people look at Go as a company to work for again. All the ribbing that the KLM guys have been giving the Go guys may now be blowing up in their faces.So I think that the yellow paint supposedly on order for Go's aircraft is going to be swapped for more multi colour paint to aid a fleet expansion.

It's time to take on Easyjet and Ryanair who have had it too good for too long.

[What_does_this_button_do?]

<font face="Verdana, Arial, Helvetica" size="2">EasyJet takes it easy over Go deal

by Peter Cunliffe, Daily Mail

BUDGET airline easyJet is not worried by the imminent £100m sale of rival Go to venture capitalist 3i by British Airways. 'We thought about buying it, but not for very long. We know how painful acquisitions can be. Why tempt fate?' said chief executive Ray Webster.


The shares fell 7p to 403 1/2p, against 310p when chairman Stelios Haji-Ioannou floated them in November. Schroder Salomon Smith Barney rates easyJet a 'buy' and has a 500p price target. </font>

[2XL]

I appreciate it is very unlikely that KLM will acquire a stake in GO - but - I am sure I saw a white 146 with GO titles on the tail in Glasgow over the weekend.

Explain that one then, sub-lease then ?

[tunneler]

the 146's have been leased to do the new GLA-BFS route.

Hope this helps

[G-BPEC]

2XL,

Tunneler is correct, the 146 is G-ZAPO, leased from Titan to operate BFS-GLA and back for Go. The service operates with a Go flight number, and has "go now" titles on the fuselage. I understand a 737 will be placed on the route once Go have the aircraft available.