British Airways says that there is "every chance" of a merger between French independent carriers Air Liberté and TAT European Airlines, to create a single entity flying under BA colours. The combined carrier would be the second largest in France.
In its business plan, submitted to the commercial court near Paris charged with finding a buyer for Air Liberté, BA promises that the losses sustained by both airlines will be reduced to zero within three years. "At this point we will review the situation," says a BA source.
Meanwhile, the two airlines will continue as separate entities, but making use of synergies where possible. TAT is due to become, wholly owned by BA in April 1997, when full European air-transport liberalisation takes place. Its chairman, Marc Rochet, will also become chairman and managing director of Air Liberté once the 40-day period of "due diligence" is completed, in mid-December.
The commercial court admits that, until then, it is still "theoretically possible" for other bids for Air Liberté to be entered. "There is no legal reason why other bids may not be allowed," he says. Sources say that the BA offer was chosen because it was the only one which would ensure the future of the carrier, which faced liquidation after running up losses of Fr650 million ($130 million) in the first nine months of 1996. BA has promised to safeguard 1,250 out of the 1,400 jobs at the airline.
With control of TAT and Air Liberté, BA will have access to 22% of the valuable slots held at congested Paris Orly Airport, providing what the airline says is sufficient "critical mass" to attack the lucrative French domestic market.
TAT and Air Liberté overlap on just one route, between Orly and Toulouse. Their operations on the route will be combined through a code-sharing arrangement to provide 18 daily flights, which will compete with the newly opened Air France Europe shuttle service, offering a flight every half-hour.
Several domestic frequencies will be increased, but others will be cancelled. These include routes to western Africa and Canada, Tunisia and Portugal. The recently suspended services between London Gatwick and Bordeaux and Toulouse will be resumed, "…but may be operated by British Airways or TAT", says BA.
Under the deal, BA will invest Fr440 million of share capital into Air Liberté, giving it a minimum 67% holding, with the Banque Rivaud, previously the carrier's biggest shareholder (with 33%), adding the remainder.
Source: Flight International
