In a move that mirrors those made by Air France and Lufthansa in seeking greater control over their regional airline partners, British Airways has confirmed it is the bidder aiming to take over British Regional Airlines Group (BRAL) for £78 million ($110 million).
BA describes the purchase as a further step in plans to better co-ordinate its short-haul businesses and reduce fragmentation among subsidiaries and franchisees. It intends to merge BRAL, which primarily operates from Manchester Airport, with another wholly owned franchisee - Brymon Airways.
The deal has the approval of BRAL's three major shareholders - bmi british midland chairman Sir Michael Bishop, BRAL chief executive Terry Liddiard, and Schroder Investment Management - which control 52% of the equity. Most of the remainder is traded on the London Stock Exchange following the company's flotation in 1998. BRAL had sales of £109 million in 1999 and made a pre-tax profit of £7.8 million. The expectation for last year was for a profit of at least £10 million.
The BRAL move is in line with BA's efforts to return its European operation to profitability, which includes closer collaboration between another subsidiary - CityFlyer Express - and its European operations at London Gatwick.
Source: Airline Business
