Julian Moxon/PARIS
BRITISH AIRWAYS has acquired the remainder of the shares in its French regional subsidiary TAT, becoming the first European flag carrier to take major advantage of the changing cross-border ownership rules in Europe.
BA took a 49.9% stake in TAT in 1992, with the option to acquire the remainder before April 1997, when European liberalisation will be complete, opening up domestic markets to outside competition.
"We intend now to take further steps to improve TAT's profitability and prepare the airline for the changes that are taking place in the French aviation market," says BA chief executive Bob Ayling. The move was made possible by the French Government's acceptance in February of the European ruling that French-owned airlines could be owned by nationals anywhere within the European Union. European Commission approval for the move is expected in September.
TAT has made consistent losses over the past four years, although Michel Marchais, who founded the airline in 1968, says that the deficit has been falling after the 1995 restructuring. He says that TAT's losses were cut to around Fr250 million ($50 million) in the financial year to March 1996, down from Fr400 million in 1994/5. Marchais adds that the figure is likely to be "-halved again" this year. BA had not previously revealed the scale of the loss.
"At group level, TAT is likely to break even for BA this year," says David Scowsill, BA's regional director for Europe. He adds that TAT has already contributed to the group, since around 40% of the traffic it carries out of France feeds on to BA's profitable long-haul services. BA paid Fr320 million for its initial stake in the airline, and will pay around Fr160 million for the remaining share.
BA has named Marc Rochet, previously head of another French independent, AOM, as the new president of TAT, a post occupied by Marchais since 1968.
BA is now fully in control of TAT
Source: Flight International
