BA flogs Deutsche BA

[Konkordski]

Psst!

Wanna buy an airline? One euro to you, guv.

British Airways has sold its lossmaking German business Deutsche BA to a consultancy called Intro, a snip at one euro and share of profits.

[HZ123]

Which bit of it is a snip then. The outfit has never made a profit in its 10 plus years of being. The staff were totally against any changes and vast sums have been thrown at it. The only thing BA seems to have gained is the cabin conversion to leather which DBA had from day one.

[cirrus01]

Financial sense at last ! Concorde going, DBA going, blimey! reality is really arriving at BA. Next target ? How about those thousands of mis-managers at Waterworld ? ( Is the "Manager - Bread rolls - Europe" still there ? ) :p :p :p

[Buster the Bear]

BA sells DBA to Intro

British Airways has signed an agreement today, Monday 2 June, 2003, to sell its wholly owned German subsidiary dba (formerly Deutsche BA) to a Nuremburg-based aviation consultancy and investment company, Intro Verwaltungsgesellschaft mbH.

Intro will buy the entire share capital of dba for 1 Euro.
As part of the transaction, British Airways will invest up to £25 million (35 million Euros) in dba and will also underwrite the German carrier's fleet of 16 aircraft for one year, at a cost of £2 million (3 million Euros) per month.

In exchange, British Airways will receive 25 per cent of any dba profits, or 25 per cent of any profit on disposal of dba, up to June 2006.

Roger Maynard, chairman of dba and British Airways' director of investments and joint ventures, said: "Dba does not fit with our core full service network strategy and the new owners will be able to give the business the commercial focus it needs. The people in dba have done a great job in carving an important niche in the German domestic market with an operational performance second to none. I wish them well.

This deal is a sensible one in the current climate. It ends our exposure to German losses yet gives us the benefit of a share in any profits that the company makes in the next three years.

There are no changes to dba's flights, as a result of the change in ownership, and for customers and staff it is very much business as usual".

Hans Rudolf Wöhrl, chief executive officer of Intro Verwaltungsgesellschaft mbH, has considerable experience in the aviation industry. He was the founder of NFD, forerunner of Eurowings, and also was a member of the dba board between 1994 and 2001.

The sale transaction will be completed by July 1 2003.

[maxy101]

Another brilliant investment decision by those brains in Waterworld. I wonder how much it will be resold for in 12 months time? I can see the reply now "Oh, but with the benefit of hindsight....." How do these people manage to keep their jobs?

[unwiseowl]

Perhaps Easyjet would have purchased it at that price?

[seacue]

Note that the "selling" price was in fact about minus 50 million pounds!

BA have agreed to subsidize the planes for a year costing about UKP 24 million.

They have also agreed to "invest" up to UKP 25 million.

So BA is giving Intro about UKP 50 million to take DBA off their hands.

[mainfrog2]

Just so you all get every bit of the story. BA is also going to get 25% of DBA's profits until 2006 and if the new owners sell it off in that time then BA gets a cut of the profit made on the sale.

Just like Buster said earlier so if the company does suddenly become more valuable in the next 3 years then BA benefit.


So maxy101 stick that in yer pipe.

[Goldstone]

Another incredibly well thought out business strategy from our idiot friends at BA.

Start an airline in Germany. It loses money for 12 years. Sell it and pay the the owners £25m to take it off your hands.

Surely our national airline can find some people with at least GCSE level Economics to make decisions at the airline.

[PAXboy]

I stand to be corrected on this first point: I don't think that BA started dba? They bought a pre-existing carrier?

On this I am more certain, "Surely our national airline can ..." BA is not our national airline. Across Europe the nationalised airlines are being sold off. The UK government does not own BA, it is a plc with the only restriction that 51% (I think) of the stock must be UK owned.

I only had cause to use dba for one return trip, MUC~LGW~MUC. It was grim. Service and food and everything was poor. In the luggage hall, another pax commented to their partner that they had enjoyed far higher service on LOT.

OK, anyone can get it wrong but I was comparing it to MUC~LHR on BA that I used numerous times. The LHR service on the main line was very good.

Now that dba is back in German hands, they are more likely to get the changes in Terms & Conditions, I should say. Helping this is the fact that the German parliament has just voted for big changes on the financial front. These are changes that have been resisted for many years. It may be that the German citizen is beginning to see that times have changed.

[HZ123]

Paxboy is right they were an existying airline and BA at the time made a bold decision to try and compete within Europe and particularly within Germany.

It was a one class operation with fixed ticket prices below the market rate. Had they been an LC operator many of you would praise them (BA) for iniative. Much of it came to grief as the German aviation industry was found to be highly unionised and far less flexible than our UK setup (which was hardly flexible itself).

Many of the negative thread comments are valid though as BA has spent far to much time going off buying / franchising other airlines and making very limited progress at high cost.

[Globaliser]

HZ123: Many of the negative thread comments are valid though as BA has spent far to much time going off buying / franchising other airlines and making very limited progress at high cost.It was a strategy that seemed worth trying at the time. Most big carriers were at it in some form. BA tried, failed and survived in decent health. Which is more than can be said for some others, notably SR and NZ.