EasyJet will expand its London Gatwick operation, already its largest base, by about 30% following its £103.5 million ($212 million) cash purchase of GB Airways. The low-cost carrier agreed in late October to buy GB Airways, currently a BA franchise.
BA opted against exercising its option to buy GB and will terminate its franchise agreement with the carrier from next March. Earlier this year BA similarly opted against buying former franchise BMED, which instead was acquired by bmi. It also has now decided to terminate its franchise agreement with Scottish regional carrier Loganair, in line with a new strategy that focuses on its core business and lucrative long-haul operations.
"UK franchises have outlived their purpose," BA says. "Buying GB Airways would not add any value to our business when we already have a base and extensive network at Gatwick."
EasyJet says its slot holdings at Gatwick will increase by 28 slot pairs when GB is consolidated into easyJet in March 2008. Its Gatwick market share, based on departures in its 2007 summer schedule, will increase from 19% to 27%. Following the acquisition easyJet will operate 62 routes from Gatwick and carry an estimated 8 million passengers per year, up from the 6 million it currently handles.
GB now operates 28 routes from Gatwick to destinations in southern Europe and North Africa. It also operates six routes from Manchester and five from Heathrow. Its Heathrow slots were excluded from the sale and will be sold separately by the Bland Group, the previous owner of GB, in three different deals.
EasyJet says the acquisition is consistent with its expansion strategy, enabling the airline to expand its scale at Gatwick and accelerate route development. GB will be fully consolidated into easyJet by winter 2008/09. BA intends to launch services under its own name on six of the routes now operated by GB.
Source: Airline Business
