VIRGIN IS NEGOTIATING to buy a controlling stake in Brussels-based Euro Belgian Airlines (EBA), which could form the backbone of long-standing ambitions by Virgin's owner, Richard Branson, to set up a low-cost European operation.
Virgin has completed a detailed study into launching a start-up carrier at Brussels, probably flying British Aerospace 146s. An investment in EBA, however, would give the company a ready-made Brussels operation from which to launch a European network.
EBA is now co-owned by Belgium's City Hotels group, which holds a controlling 51% stake, and Luxembourg holding company NEI, which has the remainder. Virgin is understood to have signed a memorandum of understanding (MoU) under which it would purchase an 80% stake in the carrier, for BFr2 billion ($65 million), leaving the two existing owners holding 10% each.
Under the terms of the MoU, the deal has to be signed before 30 April, and Virgin has an option to buy 50% of the remaining stock over the next three years.
If the deal goes ahead, the airline would fly in Virgin colours, but as a separate company from the long-haul Virgin Atlantic operation. EBA has been growing rapidly, increasing its sales by 51% in 1995 to reach BFr5 billion. Last year it carried 1.3 million passengers with a fleet of 11 Boeing 737s on scheduled and charter services.
Source: Flight International
