Marc Rochet, the joint president of the two British Airways subsidiaries in France, TAT European Airlines and Air Liberté, has made a start on moves to merge the two carriers to "-take advantage of the synergies" and create the country's second-biggest airline.
Under a French legal process, which is similar to a franchising arrangement and which was also used in the Air France/Air Inter merger, Air Liberté will effectively take over financial control of the two airlines from 1 April. Air Liberté is understood to have been chosen as the "lead airline" because of its workforce's lower salaries, although the move is expected to lead to objections from TAT staff.
BA recently acquired a 70% stake in Air Liberté, with the remainder held by Banque Rivaud, while the UK carrier fully owns TAT. Both will now come under a new holding company.
The two carriers are studying ways of improving synergies on routes and with the fleet. One possibility is for cross-utilisation of TAT's Fokker 100s and Air Liberté's McDonnell Douglas MD-83s. Cost-cutting measures are being implemented, to reduce the losses still being sustained by both airlines. TAT is expected to show a small operating loss when its figures are released at the end of the month, while Air Liberté was running at a loss of around Fr1 billion ($180 million) at its financial year-end in October 1996.
French independent AOM lost Fr140 million in 1996 against a profit of Fr27 million the previous year. The airline says that the losses date to the provisions used to cover the merger of Minerve and Air Outre Mer in 1992. Sales grew by 10%, to Fr3.47 billion, as passenger numbers soared by 30%.
Source: Flight International
